.The Russell 2000 may possess a profitability problem.Though the small-cap mark gained 10.1% in July, it is actually dropped approximately 4% thus far in August, as of Thursday morning.ALPS' Paul Baiocchi achieves the inconsistent relocate to the index's overall arrangement, with an estimate from Apollo Global revealing 40% of those providers possess adverse earnings." [Real estate investors] have primarily surrendered on their own to the simple fact that by residing in the Russell 2000, I am actually merely heading to must take the excellent with the poor," the agency's principal ETF schemer told CNBC's "ETF Upper hand" this week.To steer clear of the profitability burden, Baiocchi suggests entrepreneurs prioritize premium companies, looking at even more careful exchange-traded funds including his organization's O'Shares U.S. Small-Cap High Quality Dividend ETF Allotments (OUSM)." The concept is premium providers that spend and develop their rewards, and notably, have less dryness than their peers," he pointed out. "It enables advisors and also capitalists who have found little limits go laterally for five years to be allocated to a category that is actually dragged." In addition to its own earnings display screen, the fund contains only 107 sells u00e2 $" a portion of what's inside the Russell 2000. Its best three holdings are actually Tradeweb Markets, Juniper Networks and Old Commonwealth International, each resting at an about 2% weighting in the fund, per FactSet.Shares of the small-cap fund are down 1.5% month to date u00e2 $" exceeding the Russell by much more than 2 portion points during that time.Disclaimer.