.The Russell 2000 might possess an earnings problem.Though the small-cap index got 10.1% in July, it is actually dropped roughly 4% so far in August, since Thursday morning.ALPS' Paul Baiocchi records the unpredictable transfer to the mark's general composition, with an estimate from Apollo Global revealing 40% of those business have damaging revenues." [Investors] have generally surrendered themselves to the fact that by being in the Russell 2000, I'm merely visiting need to take the great along with the poor," the agency's main ETF strategist said to CNBC's "ETF Upper hand" this week.To stay away from the productivity burden, Baiocchi advises financiers prioritize quality business, looking at more selective exchange-traded funds like his company's ALPS O'Shares united state Small-Cap Premium Dividend ETF Shares (OUSM)." The suggestion is high quality business that spend and increase their returns, as well as essentially, have a lot less volatility than their peers," he said. "It allows experts and also investors who have seen tiny limits go laterally for 5 years to become allocated to a category that is actually dragged." Along with its earnings display, the fund contains only 107 stocks u00e2 $" a fraction of what's inside the Russell 2000. Its top 3 holdings are Tradeweb Markets, Juniper Networks and also Old State International, each sitting at an approximately 2% weighting in the fund, every FactSet.Shares of the small-cap fund are actually down 1.5% month to day u00e2 $" surpassing the Russell by greater than 2 percent aspects because time.Disclaimer.