.The Russell 2000 may possess a productivity problem.Though the small-cap index obtained 10.1% in July, it's lost roughly 4% so far in August, as of Thursday morning.ALPS' Paul Baiocchi chalks up the unpredictable moves to the index's overall composition, with a price quote coming from Apollo Global showing 40% of those firms have negative revenues." [Capitalists] have essentially resigned themselves to the reality that through being in the Russell 2000, I'm simply going to need to take the great along with the poor," the firm's main ETF planner told CNBC's "ETF Advantage" this week.To stay clear of the success pain, Baiocchi recommends clients focus on top quality firms, examining additional selective exchange-traded funds like his company's ALPS O'Shares U.S. Small-Cap Premium Reward ETF Reveals (OUSM)." The suggestion is premium companies that pay for and also develop their rewards, as well as notably, have much less volatility than their peers," he said. "It permits advisors and real estate investors that have actually viewed small limits go sideways for 5 years to be allocated to a classification that is actually lagged." In addition to its profits screen, the fund includes merely 107 inventories u00e2 $" a fraction of what's inside the Russell 2000. Its top 3 holdings are Tradeweb Markets, Juniper Networks and also Old Republic International, each resting at an approximately 2% weighting in the fund, every FactSet.Shares of the small-cap fund are actually down 1.5% month to date u00e2 $" outshining the Russell by much more than 2 amount points in that time.Disclaimer.