.The Russell 2000 may have an earnings problem.Though the small-cap mark obtained 10.1% in July, it's fallen approximately 4% thus far in August, as of Thursday morning.ALPS' Paul Baiocchi chalks up the volatile moves to the mark's total arrangement, along with a price quote coming from Beauty Global showing 40% of those business possess bad incomes." [Entrepreneurs] have primarily surrendered on their own to the simple fact that by residing in the Russell 2000, I am actually only going to need to take the good with the bad," the company's principal ETF planner informed CNBC's "ETF Advantage" this week.To stay clear of the productivity drag, Baiocchi suggests entrepreneurs focus on quality companies, taking a look at more careful exchange-traded funds like his company's O'Shares USA Small-Cap Quality Returns ETF Shares (OUSM)." The concept is high quality companies that pay out and also expand their rewards, and importantly, possess a lot less dryness than their peers," he stated. "It permits advisors and also clients that have actually found tiny hats go sideways for five years to be allocated to a classification that is actually lagged." In addition to its own productivity display screen, the fund has just 107 sells u00e2 $" a fraction of what's inside the Russell 2000. Its top three holdings are Tradeweb Markets, Juniper Networks as well as Old Republic International, each sitting at an approximately 2% weighting in the fund, every FactSet.Shares of the small-cap fund are down 1.5% month to time u00e2 $" outshining the Russell through more than 2 percent points because time.Disclaimer.