.The Russell 2000 may possess a profitability problem.Though the small-cap mark got 10.1% in July, it is actually fallen approximately 4% until now in August, since Thursday morning.ALPS’ Paul Baiocchi chalks up the inconsistent moves to the mark’s general composition, along with a price quote coming from Apollo Global revealing 40% of those companies possess bad earnings.” [Real estate investors] have essentially resigned on their own to the simple fact that through residing in the Russell 2000, I’m simply heading to need to take the great along with the bad,” the firm’s main ETF planner told CNBC’s “ETF Edge” this week.To steer clear of the profitability bother, Baiocchi recommends financiers focus on quality companies, looking at more particular exchange-traded funds including his firm’s O’Shares united state Small-Cap Quality Dividend ETF Shares (OUSM).” The idea is actually high quality firms that pay for and also grow their dividends, and essentially, have less volatility than their peers,” he said. “It enables consultants and also clients who have actually observed little hats go sideways for five years to become assigned to a group that’s delayed.” Besides its own productivity monitor, the fund includes just 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 resting at an about 2% weighting in the fund, per FactSet.Shares of the small-cap fund are down 1.5% month to date u00e2 $” exceeding the Russell by much more than 2 portion points in that time.Disclaimer.