.The Russell 2000 might possess a profitability problem.Though the small-cap mark gained 10.1% in July, it is actually gone down roughly 4% until now in August, as of Thursday morning.ALPS' Paul Baiocchi earns the inconsistent transfer to the index's general composition, along with an estimation coming from Apollo Global presenting 40% of those providers possess adverse profits." [Entrepreneurs] have generally resigned themselves to the simple fact that by residing in the Russell 2000, I am actually just visiting must take the great with the negative," the company's chief ETF schemer said to CNBC's "ETF Upper hand" this week.To stay away from the profitability nuisance, Baiocchi suggests financiers prioritize top quality business, taking a look at even more discerning exchange-traded funds including his firm's mountain range O'Shares united state Small-Cap Premium Returns ETF Reveals (OUSM)." The suggestion is actually quality providers that pay out and also increase their rewards, and significantly, possess much less volatility than their peers," he pointed out. "It permits consultants as well as financiers that have observed little caps go sidewards for five years to be assigned to a classification that's lagged." Along with its own productivity display, the fund has only 107 inventories u00e2 $" a fraction of what is actually inside the Russell 2000. Its top three holdings are actually Tradeweb Markets, Juniper Networks and also Old Republic International, each resting at an around 2% weighting in the fund, per FactSet.Shares of the small-cap fund are down 1.5% month to day u00e2 $" outperforming the Russell through much more than 2 amount aspects during that time.Disclaimer.