.The Russell 2000 might possess a success problem.Though the small-cap index got 10.1% in July, it's gone down around 4% up until now in August, as of Thursday morning.ALPS' Paul Baiocchi earns the unstable transfer to the index's general arrangement, with an estimate from Apollo Global revealing 40% of those companies possess damaging profits." [Investors] have actually basically surrendered themselves to the simple fact that by residing in the Russell 2000, I'm merely visiting need to take the good with the poor," the organization's principal ETF schemer told CNBC's "ETF Upper hand" this week.To stay away from the profits pain, Baiocchi recommends clients focus on high quality firms, looking at additional careful exchange-traded funds like his company's mountain range O'Shares U.S. Small-Cap Quality Dividend ETF Reveals (OUSM)." The tip is high quality companies that spend and increase their dividends, and also significantly, possess much less dryness than their peers," he stated. "It enables specialists and real estate investors who have seen little limits go sideways for five years to be allocated to a type that is actually lagged." Besides its own profitability monitor, the fund consists of merely 107 stocks u00e2 $" a fraction of what is actually inside the Russell 2000. Its own leading three holdings are actually Tradeweb Markets, Juniper Networks and also Old Commonwealth International, each sitting at an about 2% weighting in the fund, every FactSet.Shares of the small-cap fund are actually down 1.5% month to date u00e2 $" outperforming the Russell by much more than 2 portion points in that time.Disclaimer.