.The Russell 2000 may possess a success problem.Though the small-cap mark acquired 10.1% in July, it is actually lost around 4% up until now in August, as of Thursday morning.ALPS' Paul Baiocchi earns the unpredictable transfer to the index's overall composition, along with a quote from Beauty Global showing 40% of those business possess damaging profits." [Entrepreneurs] have primarily resigned themselves to the fact that by being in the Russell 2000, I'm only going to must take the good with the negative," the company's main ETF planner said to CNBC's "ETF Upper hand" this week.To stay clear of the productivity pain, Baiocchi recommends financiers prioritize high quality firms, examining more careful exchange-traded funds including his company's O'Shares united state Small-Cap Quality Returns ETF Allotments (OUSM)." The tip is actually quality companies that pay and also develop their dividends, and also importantly, have less volatility than their peers," he mentioned. "It permits experts as well as entrepreneurs that have found little hats go sideways for five years to become allocated to a type that's delayed." Along with its earnings screen, the fund includes simply 107 supplies u00e2 $" a fraction of what's inside the Russell 2000. Its leading 3 holdings are Tradeweb Markets, Juniper Networks and Old State International, each sitting at an about 2% weighting in the fund, per FactSet.Shares of the small-cap fund are down 1.5% month to day u00e2 $" exceeding the Russell through more than 2 percentage aspects in that time.Disclaimer.