.The Russell 2000 might possess a profitability problem.Though the small-cap index got 10.1% in July, it's lost approximately 4% so far in August, as of Thursday morning.ALPS' Paul Baiocchi chalks up the unpredictable transfer to the mark's total composition, along with an estimate from Beauty Global showing 40% of those firms have damaging incomes." [Real estate investors] have primarily surrendered themselves to the simple fact that through being in the Russell 2000, I am actually just mosting likely to need to take the really good with the negative," the agency's main ETF strategist informed CNBC's "ETF Upper hand" this week.To prevent the profitability nuisance, Baiocchi recommends capitalists focus on high quality business, checking out even more particular exchange-traded funds like his firm's ALPS O'Shares united state Small-Cap Top Quality Returns ETF Reveals (OUSM)." The tip is premium business that pay out and expand their returns, as well as notably, possess much less volatility than their peers," he said. "It enables experts and entrepreneurs who have found small caps go sideways for five years to be allocated to a group that is actually delayed." Aside from its own profitability screen, the fund contains just 107 inventories u00e2 $" a portion of what's inside the Russell 2000. Its best 3 holdings are actually Tradeweb Markets, Juniper Networks as well as Old Republic 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 date u00e2 $" outruning the Russell through more than 2 percentage factors because time.Disclaimer.