.The Russell 2000 may have a productivity problem.Though the small-cap index acquired 10.1% in July, it's lost around 4% thus far in August, since Thursday morning.ALPS' Paul Baiocchi achieves the inconsistent transfer to the mark's overall arrangement, along with an estimation coming from Beauty Global revealing 40% of those companies possess unfavorable earnings." [Entrepreneurs] have actually essentially surrendered themselves to the fact that through residing in the Russell 2000, I am actually just going to have to take the excellent with the negative," the agency's chief ETF planner said to CNBC's "ETF Upper hand" this week.To avoid the profitability drag, Baiocchi proposes entrepreneurs prioritize quality firms, considering more selective exchange-traded funds such as his company's mountain range O'Shares united state Small-Cap Top Quality Dividend ETF Portions (OUSM)." The tip is quality providers that pay out as well as increase their dividends, and notably, possess a lot less volatility than their peers," he stated. "It permits advisors as well as financiers who have actually found tiny hats go sideways for 5 years to become alloted to a type that is actually delayed." In addition to its own earnings display screen, the fund includes simply 107 supplies u00e2 $" a fraction of what's inside the Russell 2000. Its best 3 holdings are Tradeweb Markets, Juniper Networks as well as 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 time u00e2 $" outmatching the Russell by more than 2 percentage aspects during that time.Disclaimer.