.The Russell 2000 may have a productivity problem.Though the small-cap index gained 10.1% in July, it is actually dropped about 4% until now in August, as of Thursday morning.ALPS' Paul Baiocchi chalks up the volatile moves to the mark's overall composition, along with an estimate from Apollo Global showing 40% of those providers possess bad earnings." [Entrepreneurs] have essentially resigned themselves to the simple fact that by being in the Russell 2000, I'm merely visiting have to take the excellent along with the bad," the organization's chief ETF planner said to CNBC's "ETF Upper hand" this week.To stay away from the earnings pain, Baiocchi proposes clients prioritize high quality companies, taking a look at even more careful exchange-traded funds such as his company's O'Shares U.S. Small-Cap High Quality Returns ETF Allotments (OUSM)." The suggestion is premium providers that pay for and also expand their rewards, and also importantly, possess less dryness than their peers," he said. "It permits specialists and clients that have seen little caps go sidewards for 5 years to be alloted to a category that is actually dragged." Along with its own profitability monitor, the fund consists of simply 107 sells u00e2 $" a portion of what's inside the Russell 2000. Its best 3 holdings are Tradeweb Markets, Juniper Networks and Old Republic International, each resting at an about 2% weighting in the fund, every FactSet.Shares of the small-cap fund are down 1.5% month to day u00e2 $" outperforming the Russell by greater than 2 percent aspects because time.Disclaimer.