.The Russell 2000 might possess a success problem.Though the small-cap mark got 10.1% in July, it is actually lost roughly 4% until now in August, since Thursday morning.ALPS' Paul Baiocchi records the inconsistent relocate to the index's general composition, along with an estimation from Apollo Global revealing 40% of those providers have damaging incomes." [Investors] have essentially resigned themselves to the truth that by remaining in the Russell 2000, I am actually simply mosting likely to have to take the great with the negative," the company's main ETF strategist told CNBC's "ETF Upper hand" this week.To stay clear of the profitability pain, Baiocchi proposes investors prioritize top quality companies, examining more discerning exchange-traded funds such as his firm's mountain range O'Shares U.S. Small-Cap Quality Reward ETF Reveals (OUSM)." The suggestion is high quality companies that pay out and also develop their rewards, and notably, have a lot less volatility than their peers," he stated. "It permits experts and also clients that have actually found little hats go sideways for five years to be assigned to a type that is actually lagged." Aside from its success display screen, the fund includes only 107 supplies u00e2 $" a fraction of what's inside the Russell 2000. Its leading 3 holdings are Tradeweb Markets, Juniper Networks and also Old Commonwealth International, each resting at an about 2% weighting in the fund, every FactSet.Shares of the small-cap fund are down 1.5% month to date u00e2 $" outruning the Russell by more than 2 percentage factors during that time.Disclaimer.