.The Russell 2000 may have an earnings problem.Though the small-cap mark acquired 10.1% in July, it's dropped around 4% until now in August, as of Thursday morning.ALPS' Paul Baiocchi records the volatile transfer to the mark's general arrangement, with an estimation from Apollo Global revealing 40% of those business have damaging profits." [Entrepreneurs] have actually generally resigned on their own to the truth that by residing in the Russell 2000, I'm simply going to must take the really good along with the negative," the agency's principal ETF strategist informed CNBC's "ETF Upper hand" this week.To stay clear of the profits drag, Baiocchi advises real estate investors focus on quality providers, examining more careful exchange-traded funds like his organization's mountain range O'Shares united state Small-Cap High Quality Dividend ETF Shares (OUSM)." The tip is actually quality providers that pay and also expand their returns, and also importantly, have less dryness than their peers," he said. "It permits consultants and also capitalists who have seen tiny limits go sideways for 5 years to become alloted to a classification that is actually dragged." Besides its success screen, the fund contains merely 107 supplies u00e2 $" a fraction of what is actually inside the Russell 2000. Its own leading three holdings are actually Tradeweb Markets, Juniper Networks and also Old Commonwealth International, each resting at a roughly 2% weighting in the fund, per FactSet.Shares of the small-cap fund are actually down 1.5% month to time u00e2 $" outmatching the Russell through greater than 2 portion aspects during that time.Disclaimer.