.The Russell 2000 may have a success problem.Though the small-cap mark got 10.1% in July, it's dropped around 4% so far in August, as of Thursday morning.ALPS' Paul Baiocchi achieves the volatile transfer to the mark's overall composition, with an estimation from Beauty Global showing 40% of those firms have unfavorable revenues." [Investors] have basically surrendered themselves to the reality that by being in the Russell 2000, I'm merely going to must take the good with the negative," the organization's main ETF planner told CNBC's "ETF Edge" this week.To stay clear of the productivity bother, Baiocchi suggests clients prioritize premium business, examining additional discerning exchange-traded funds including his organization's O'Shares U.S. Small-Cap High Quality Reward ETF Shares (OUSM)." The concept is actually quality firms that spend and develop their dividends, and also significantly, possess less volatility than their peers," he mentioned. "It makes it possible for experts and investors who have actually viewed small hats go laterally for five years to be designated to a type that is actually lagged." Aside from its earnings screen, the fund has simply 107 sells u00e2 $" a fraction of what is actually inside the Russell 2000. Its own top three holdings are Tradeweb Markets, Juniper Networks and Old Republic International, each resting at an about 2% weighting in the fund, every FactSet.Shares of the small-cap fund are actually down 1.5% month to time u00e2 $" outperforming the Russell through more than 2 percent factors during that time.Disclaimer.