.The Russell 2000 might have an earnings problem.Though the small-cap index got 10.1% in July, it's fallen around 4% so far in August, as of Thursday morning.ALPS' Paul Baiocchi chalks up the unpredictable relocate to the mark's general arrangement, with an estimation from Apollo Global presenting 40% of those firms possess bad revenues." [Real estate investors] have actually essentially resigned on their own to the fact that through being in the Russell 2000, I'm only visiting have to take the good along with the poor," the firm's main ETF strategist told CNBC's "ETF Upper hand" this week.To prevent the earnings pain, Baiocchi proposes financiers focus on quality companies, examining additional discerning exchange-traded funds like his company's ALPS O'Shares united state Small-Cap High Quality Returns ETF Shares (OUSM)." The idea is quality companies that pay out as well as expand their dividends, and also notably, have less dryness than their peers," he stated. "It makes it possible for experts as well as investors that have actually found tiny hats go sideways for 5 years to be alloted to a group that is actually delayed." In addition to its own success display, the fund consists of only 107 inventories u00e2 $" a portion 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 more than 2 percent aspects in that time.Disclaimer.