.The Russell 2000 may possess a productivity problem.Though the small-cap index acquired 10.1% in July, it's dropped roughly 4% until now in August, as of Thursday morning.ALPS' Paul Baiocchi records the unstable transfer to the index's overall arrangement, along with a quote from Beauty Global revealing 40% of those providers have negative profits." [Real estate investors] have actually primarily surrendered themselves to the truth that through being in the Russell 2000, I am actually simply heading to must take the really good with the negative," the company's principal ETF schemer told CNBC's "ETF Advantage" this week.To stay away from the productivity nuisance, Baiocchi recommends investors prioritize quality firms, considering even more particular exchange-traded funds such as his company's O'Shares U.S. Small-Cap High Quality Reward ETF Shares (OUSM)." The concept is actually premium companies that pay for and grow their returns, and also essentially, have less dryness than their peers," he pointed out. "It allows consultants as well as investors that have viewed little limits go sidewards for five years to become assigned to a classification that's lagged." Besides its profitability screen, the fund contains just 107 stocks u00e2 $" a fraction of what is actually inside the Russell 2000. Its own best three holdings are Tradeweb Markets, Juniper Networks and also Old Republic International, each sitting at an approximately 2% weighting in the fund, every FactSet.Shares of the small-cap fund are actually down 1.5% month to day u00e2 $" outruning the Russell through greater than 2 portion factors because time.Disclaimer.