.The Russell 2000 might have an earnings problem.Though the small-cap index got 10.1% in July, it's lost approximately 4% thus far in August, since Thursday morning.ALPS' Paul Baiocchi records the inconsistent moves to the mark's overall arrangement, with an estimation coming from Beauty Global presenting 40% of those companies have unfavorable earnings." [Real estate investors] have actually primarily surrendered themselves to the truth that by residing in the Russell 2000, I am actually merely visiting need to take the really good with the bad," the organization's principal ETF strategist said to CNBC's "ETF Edge" this week.To stay away from the profits bother, Baiocchi proposes capitalists focus on quality companies, looking at even more discerning exchange-traded funds including his agency's mountain range O'Shares united state Small-Cap Quality Returns ETF Reveals (OUSM)." The tip is actually top quality providers that pay and expand their rewards, and significantly, have a lot less volatility than their peers," he pointed out. "It makes it possible for experts and clients that have found small limits go sidewards for five years to become alloted to a classification that's delayed." Along with its own profits monitor, the fund has only 107 supplies u00e2 $" a fraction of what is actually inside the Russell 2000. Its own top three holdings are Tradeweb Markets, Juniper Networks as well as Old Commonwealth International, each sitting at a roughly 2% weighting in the fund, per FactSet.Shares of the small-cap fund are actually down 1.5% month to time u00e2 $" exceeding the Russell by much more than 2 percentage factors in that time.Disclaimer.