.The Russell 2000 might possess a success problem.Though the small-cap index got 10.1% in July, it is actually gone down about 4% up until now in August, since Thursday morning.ALPS' Paul Baiocchi earns the unpredictable relocate to the index's total arrangement, with an estimate coming from Apollo Global revealing 40% of those business possess damaging incomes." [Investors] have generally surrendered themselves to the truth that by residing in the Russell 2000, I'm only visiting must take the good along with the bad," the organization's chief ETF planner informed CNBC's "ETF Advantage" this week.To steer clear of the profitability drag, Baiocchi recommends clients prioritize top quality business, checking out more selective exchange-traded funds like his company's O'Shares U.S. Small-Cap Top Quality Returns ETF Reveals (OUSM)." The idea is high quality business that pay out and also grow their rewards, and importantly, possess less volatility than their peers," he mentioned. "It makes it possible for experts as well as clients that have found little hats go laterally for five years to become designated to a group that's delayed." Along with its productivity display, the fund contains only 107 stocks u00e2 $" a fraction of what is actually inside the Russell 2000. Its own best 3 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 day u00e2 $" outmatching the Russell by greater than 2 portion factors in that time.Disclaimer.