.The Russell 2000 might possess a profitability problem.Though the small-cap mark obtained 10.1% in July, it is actually lost around 4% so far in August, as of Thursday morning.ALPS' Paul Baiocchi earns the volatile transfer to the index's general composition, along with a quote from Beauty Global presenting 40% of those companies have bad profits." [Entrepreneurs] have actually basically resigned on their own to the truth that through residing in the Russell 2000, I'm merely heading to must take the excellent along with the poor," the organization's main ETF schemer said to CNBC's "ETF Advantage" this week.To prevent the earnings burden, Baiocchi proposes financiers focus on top quality companies, looking at more careful exchange-traded funds like his agency's ALPS O'Shares U.S. Small-Cap Premium Dividend ETF Reveals (OUSM)." The idea is actually top quality providers that spend and expand their dividends, and also importantly, possess a lot less dryness than their peers," he pointed out. "It allows advisors and also entrepreneurs that have viewed tiny hats go sideways for 5 years to become alloted to a category that is actually lagged." Aside from its success display screen, the fund includes only 107 inventories u00e2 $" a fraction of what's inside the Russell 2000. Its top 3 holdings are actually Tradeweb Markets, Juniper Networks and Old Commonwealth International, each sitting at an approximately 2% weighting in the fund, per FactSet.Shares of the small-cap fund are down 1.5% month to day u00e2 $" surpassing the Russell by more than 2 percent aspects during that time.Disclaimer.