.The Russell 2000 might possess a productivity problem.Though the small-cap mark acquired 10.1% in July, it is actually gone down roughly 4% so far in August, since Thursday morning.ALPS' Paul Baiocchi chalks up the volatile moves to the mark's total arrangement, along with an estimate coming from Apollo Global showing 40% of those firms have adverse profits." [Capitalists] have actually generally surrendered themselves to the simple fact that through residing in the Russell 2000, I am actually simply going to need to take the great along with the poor," the company's main ETF strategist said to CNBC's "ETF Upper hand" this week.To steer clear of the earnings drag, Baiocchi advises financiers prioritize quality companies, examining additional discerning exchange-traded funds including his agency's ALPS O'Shares USA Small-Cap Premium Returns ETF Portions (OUSM)." The suggestion is actually quality companies that spend and increase their rewards, and also importantly, have much less volatility than their peers," he said. "It enables consultants and entrepreneurs who have actually viewed little hats go laterally for 5 years to become assigned to a type that's dragged." Aside from its profits monitor, the fund contains only 107 inventories u00e2 $" a portion of what's inside the Russell 2000. Its own top 3 holdings are Tradeweb Markets, Juniper Networks and also Old Commonwealth International, each sitting at an about 2% weighting in the fund, per FactSet.Shares of the small-cap fund are down 1.5% month to day u00e2 $" outmatching the Russell by more than 2 percent points during that time.Disclaimer.