.The Russell 2000 may have a success problem.Though the small-cap mark got 10.1% in July, it is actually dropped about 4% until now in August, since Thursday morning.ALPS' Paul Baiocchi achieves the unstable relocate to the index's overall composition, with a price quote coming from Apollo Global revealing 40% of those firms have adverse profits." [Financiers] have basically surrendered themselves to the reality that by remaining in the Russell 2000, I am actually only visiting need to take the excellent along with the bad," the organization's main ETF schemer told CNBC's "ETF Edge" this week.To avoid the productivity bother, Baiocchi suggests investors prioritize premium companies, taking a look at more discerning exchange-traded funds including his organization's mountain range O'Shares U.S. Small-Cap High Quality Returns ETF Reveals (OUSM)." The suggestion is actually premium firms that pay and grow their rewards, as well as notably, have less volatility than their peers," he mentioned. "It allows advisors and capitalists who have actually seen little hats go sidewards for 5 years to be allocated to a group that is actually lagged." Aside from its own profits display screen, the fund has only 107 sells u00e2 $" a fraction of what's inside the Russell 2000. Its leading three holdings are actually Tradeweb Markets, Juniper Networks and 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 $" outshining the Russell through much more than 2 percent points during that time.Disclaimer.