.The Russell 2000 may possess a success problem.Though the small-cap index gained 10.1% in July, it's gone down around 4% so far in August, since Thursday morning.ALPS' Paul Baiocchi chalks up the inconsistent transfer to the mark's overall arrangement, along with an estimation coming from Beauty Global showing 40% of those business have negative incomes." [Entrepreneurs] have generally surrendered on their own to the simple fact that through remaining in the Russell 2000, I'm simply heading to need to take the great along with the bad," the firm's main ETF schemer told CNBC's "ETF Edge" this week.To stay away from the productivity drag, Baiocchi proposes clients prioritize premium companies, looking at more discerning exchange-traded funds like his agency's ALPS O'Shares united state Small-Cap Quality Returns ETF Portions (OUSM)." The concept is actually high quality business that spend and develop their rewards, and also importantly, possess much less volatility than their peers," he said. "It permits experts as well as entrepreneurs that have actually observed small limits go sideways for five years to become assigned to a classification that's dragged." Besides its own success monitor, the fund includes simply 107 inventories u00e2 $" a fraction of what is actually inside the Russell 2000. Its own leading 3 holdings are actually Tradeweb Markets, Juniper Networks as well as Old Commonwealth International, each sitting at an around 2% weighting in the fund, per FactSet.Shares of the small-cap fund are down 1.5% month to time u00e2 $" outshining the Russell through more than 2 portion points during that time.Disclaimer.