.The Russell 2000 may have a success problem.Though the small-cap index obtained 10.1% in July, it's fallen about 4% up until now in August, as of Thursday morning.ALPS' Paul Baiocchi earns the inconsistent relocate to the index's overall composition, along with a price quote from Beauty Global showing 40% of those firms have damaging profits." [Financiers] have basically surrendered on their own to the reality that by residing in the Russell 2000, I am actually only mosting likely to need to take the really good along with the poor," the firm's chief ETF strategist said to CNBC's "ETF Advantage" this week.To avoid the success nuisance, Baiocchi recommends investors focus on top quality firms, looking at more careful exchange-traded funds including his company's O'Shares U.S. Small-Cap Top Quality Dividend ETF Reveals (OUSM)." The suggestion is quality firms that pay for and develop their returns, as well as significantly, have much less dryness than their peers," he said. "It allows specialists and also entrepreneurs who have actually viewed tiny hats go sideways for five years to be allocated to a category that is actually lagged." Along with its own productivity display, the fund includes only 107 stocks u00e2 $" a fraction of what's inside the Russell 2000. Its leading three holdings are actually Tradeweb Markets, Juniper Networks and also Old State International, each resting at an approximately 2% weighting in the fund, every FactSet.Shares of the small-cap fund are down 1.5% month to date u00e2 $" surpassing the Russell by much more than 2 portion points because time.Disclaimer.