.The Russell 2000 might have an earnings problem.Though the small-cap mark gained 10.1% in July, it's dropped approximately 4% thus far in August, since Thursday morning.ALPS' Paul Baiocchi chalks up the volatile transfer to the index's total arrangement, along with an estimate coming from Apollo Global revealing 40% of those business possess unfavorable incomes." [Clients] have essentially resigned themselves to the truth that through remaining in the Russell 2000, I am actually simply going to must take the excellent along with the bad," the company's main ETF planner said to CNBC's "ETF Upper hand" this week.To steer clear of the productivity burden, Baiocchi advises financiers prioritize high quality firms, checking out additional selective exchange-traded funds like his agency's ALPS O'Shares USA Small-Cap Premium Returns ETF Reveals (OUSM)." The tip is high quality business that pay for as well as expand their rewards, and also essentially, have a lot less volatility than their peers," he claimed. "It permits consultants as well as clients who have found tiny hats go laterally for 5 years to be alloted to a classification that's lagged." Aside from its earnings screen, the fund includes just 107 stocks u00e2 $" a fraction of what is actually inside the Russell 2000. Its own top three holdings are Tradeweb Markets, Juniper Networks and Old Republic International, each sitting at an approximately 2% weighting in the fund, per FactSet.Shares of the small-cap fund are actually down 1.5% month to day u00e2 $" exceeding the Russell through greater than 2 percentage factors during that time.Disclaimer.