.The Russell 2000 might possess an earnings problem.Though the small-cap index acquired 10.1% in July, it is actually lost about 4% up until now in August, since Thursday morning.ALPS' Paul Baiocchi chalks up the inconsistent moves to the index's general arrangement, along with a quote coming from Apollo Global showing 40% of those firms have adverse profits." [Capitalists] have generally surrendered on their own to the fact that by being in the Russell 2000, I'm only visiting need to take the excellent with the poor," the company's chief ETF strategist said to CNBC's "ETF Upper hand" this week.To stay clear of the earnings drag, Baiocchi proposes real estate investors focus on high quality business, checking out more particular exchange-traded funds such as his organization's O'Shares USA Small-Cap Quality Returns ETF Allotments (OUSM)." The concept is top quality firms that pay for as well as increase their dividends, as well as notably, have much less dryness than their peers," he said. "It allows experts as well as entrepreneurs who have actually found tiny hats go sidewards for five years to become designated to a category that is actually dragged." Along with its earnings display, the fund consists of merely 107 sells u00e2 $" a portion of what is actually inside the Russell 2000. Its own best 3 holdings are actually Tradeweb Markets, Juniper Networks as well as Old State International, each resting at a roughly 2% weighting in the fund, every FactSet.Shares of the small-cap fund are actually down 1.5% month to time u00e2 $" outmatching the Russell through much more than 2 percent factors in that time.Disclaimer.