.The Russell 2000 might have a success problem.Though the small-cap mark gained 10.1% in July, it is actually gone down approximately 4% up until now in August, since Thursday morning.ALPS' Paul Baiocchi chalks up the volatile moves to the index's total arrangement, along with an estimate from Apollo Global showing 40% of those companies possess negative incomes." [Entrepreneurs] have actually generally resigned themselves to the fact that through remaining in the Russell 2000, I am actually merely going to have to take the great along with the negative," the organization's chief ETF strategist told CNBC's "ETF Upper hand" this week.To avoid the profitability bother, Baiocchi recommends investors focus on top quality companies, taking a look at additional selective exchange-traded funds such as his agency's O'Shares U.S. Small-Cap Top Quality Returns ETF Portions (OUSM)." The suggestion is high quality business that pay as well as expand their dividends, and also importantly, have much less dryness than their peers," he mentioned. "It enables specialists as well as financiers that have actually found small caps go sideways for 5 years to become assigned to a group that's delayed." Along with its own profits screen, the fund contains merely 107 stocks u00e2 $" a fraction of what is actually inside the Russell 2000. Its best 3 holdings are Tradeweb Markets, Juniper Networks and Old State International, each resting at an around 2% weighting in the fund, per FactSet.Shares of the small-cap fund are actually down 1.5% month to day u00e2 $" outruning the Russell through much more than 2 portion aspects in that time.Disclaimer.