.The Russell 2000 may have a profitability problem.Though the small-cap mark gained 10.1% in July, it is actually dropped around 4% up until now in August, as of Thursday morning.ALPS' Paul Baiocchi chalks up the unstable moves to the index's overall arrangement, along with a price quote from Beauty Global presenting 40% of those business possess negative incomes." [Entrepreneurs] have essentially surrendered themselves to the truth that by residing in the Russell 2000, I am actually simply mosting likely to need to take the great along with the negative," the firm's principal ETF strategist told CNBC's "ETF Advantage" this week.To prevent the earnings drag, Baiocchi suggests real estate investors prioritize quality firms, examining more discerning exchange-traded funds such as his agency's ALPS O'Shares U.S. Small-Cap High Quality Dividend ETF Reveals (OUSM)." The tip is actually top quality companies that pay as well as increase their dividends, and significantly, have much less dryness than their peers," he pointed out. "It allows advisors and also real estate investors that have observed tiny caps go sideways for 5 years to be designated to a type that's dragged." Along with its earnings monitor, the fund has simply 107 inventories u00e2 $" a portion of what's inside the Russell 2000. Its top 3 holdings are actually Tradeweb Markets, Juniper Networks and Old Republic International, each sitting at an around 2% weighting in the fund, per FactSet.Shares of the small-cap fund are actually down 1.5% month to day u00e2 $" outruning the Russell through more than 2 amount aspects because time.Disclaimer.