.The Russell 2000 might have an earnings problem.Though the small-cap index acquired 10.1% in July, it is actually fallen roughly 4% up until now in August, as of Thursday morning.ALPS' Paul Baiocchi achieves the volatile moves to the mark's total composition, with a quote from Apollo Global revealing 40% of those providers have unfavorable earnings." [Real estate investors] have actually basically surrendered themselves to the truth that by being in the Russell 2000, I'm only mosting likely to have to take the excellent along with the bad," the firm's chief ETF schemer said to CNBC's "ETF Upper hand" this week.To steer clear of the productivity drag, Baiocchi recommends investors prioritize quality providers, checking out more discerning exchange-traded funds like his agency's mountain range O'Shares U.S. Small-Cap Premium Returns ETF Portions (OUSM)." The tip is actually premium firms that pay out and also grow their rewards, and notably, possess a lot less volatility than their peers," he pointed out. "It allows consultants and also real estate investors who have observed tiny caps go sideways for five years to be allocated to a group that's delayed." In addition to its profitability screen, the fund consists of only 107 inventories u00e2 $" a portion of what is actually inside the Russell 2000. Its top three holdings are actually Tradeweb Markets, Juniper Networks and Old State International, each sitting at an around 2% weighting in the fund, per FactSet.Shares of the small-cap fund are down 1.5% month to date u00e2 $" outshining the Russell through more than 2 amount points during that time.Disclaimer.