.The Russell 2000 might have a profits problem.Though the small-cap mark gained 10.1% in July, it's gone down approximately 4% so far in August, as of Thursday morning.ALPS' Paul Baiocchi records the unpredictable relocate to the mark's overall composition, along with a price quote coming from Beauty Global showing 40% of those business have unfavorable profits." [Capitalists] have actually primarily resigned themselves to the reality that by being in the Russell 2000, I'm simply visiting need to take the excellent along with the negative," the organization's main ETF strategist said to CNBC's "ETF Upper hand" this week.To stay away from the profits bother, Baiocchi suggests investors focus on quality companies, examining more selective exchange-traded funds including his company's ALPS O'Shares united state Small-Cap Quality Dividend ETF Portions (OUSM)." The concept is quality companies that pay out and also expand their returns, and also notably, possess less volatility than their peers," he pointed out. "It enables advisors as well as financiers who have found little caps go sideways for 5 years to become allocated to a group that is actually lagged." In addition to its profitability monitor, the fund includes just 107 inventories u00e2 $" a fraction 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 down 1.5% month to time u00e2 $" outmatching the Russell through greater than 2 portion aspects during that time.Disclaimer.