.The Russell 2000 may possess a profits problem.Though the small-cap mark got 10.1% in July, it's dropped around 4% until now in August, as of Thursday morning.ALPS' Paul Baiocchi earns the unstable moves to the mark's total arrangement, with a quote from Apollo Global showing 40% of those firms possess bad revenues." [Investors] have basically surrendered themselves to the fact that by being in the Russell 2000, I'm simply heading to must take the excellent along with the negative," the agency's main ETF schemer informed CNBC's "ETF Upper hand" this week.To steer clear of the profitability bother, Baiocchi proposes clients focus on premium firms, taking a look at even more discerning exchange-traded funds including his organization's O'Shares U.S. Small-Cap Quality Reward ETF Shares (OUSM)." The idea is actually quality companies that pay for and also develop their returns, as well as significantly, have less volatility than their peers," he claimed. "It permits specialists and also clients that have observed small limits go laterally for five years to be designated to a type that is actually dragged." In addition to its productivity display, the fund contains simply 107 stocks u00e2 $" a portion of what's inside the Russell 2000. Its own leading three holdings are Tradeweb Markets, Juniper Networks and Old Republic International, each resting at a roughly 2% weighting in the fund, every FactSet.Shares of the small-cap fund are actually down 1.5% month to day u00e2 $" outshining the Russell by much more than 2 portion points during that time.Disclaimer.