.The Russell 2000 may possess a productivity problem.Though the small-cap mark got 10.1% in July, it is actually fallen approximately 4% thus far in August, since Thursday morning.ALPS' Paul Baiocchi achieves the volatile relocate to the index's general arrangement, with a quote coming from Beauty Global presenting 40% of those firms possess unfavorable profits." [Entrepreneurs] have primarily resigned themselves to the reality that by residing in the Russell 2000, I am actually merely visiting have to take the good along with the negative," the firm's chief ETF planner told CNBC's "ETF Edge" this week.To stay clear of the profits pain, Baiocchi advises financiers focus on quality firms, taking a look at additional careful exchange-traded funds including his firm's ALPS O'Shares USA Small-Cap Quality Returns ETF Shares (OUSM)." The idea is actually premium companies that spend as well as expand their returns, and also significantly, possess less volatility than their peers," he pointed out. "It permits specialists and also capitalists that have actually observed small hats go sideways for five years to be alloted to a type that is actually delayed." Aside from its success screen, the fund contains only 107 stocks u00e2 $" a fraction of what is actually inside the Russell 2000. Its top three holdings are Tradeweb Markets, Juniper Networks as well as Old State International, each resting at an approximately 2% weighting in the fund, per FactSet.Shares of the small-cap fund are actually down 1.5% month to time u00e2 $" surpassing the Russell by more than 2 percent points because time.Disclaimer.