.The Russell 2000 may possess an earnings problem.Though the small-cap mark acquired 10.1% in July, it's fallen approximately 4% thus far in August, since Thursday morning.ALPS' Paul Baiocchi records the volatile moves to the mark's total composition, with an estimate from Apollo Global presenting 40% of those business possess damaging earnings." [Real estate investors] have generally surrendered themselves to the reality that through being in the Russell 2000, I am actually merely mosting likely to have to take the great with the negative," the firm's chief ETF strategist said to CNBC's "ETF Upper hand" this week.To stay clear of the profitability pain, Baiocchi advises entrepreneurs prioritize premium companies, looking at more discerning exchange-traded funds including his organization's ALPS O'Shares U.S. Small-Cap High Quality Reward ETF Reveals (OUSM)." The tip is quality providers that pay out and also grow their dividends, as well as notably, have a lot less volatility than their peers," he pointed out. "It permits consultants and entrepreneurs that have observed tiny hats go sideways for 5 years to become alloted to a category that's lagged." Besides its profits screen, the fund has merely 107 inventories u00e2 $" a fraction of what is actually inside the Russell 2000. Its own leading three holdings are Tradeweb Markets, Juniper Networks and Old State International, each sitting at an approximately 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.