.The Russell 2000 may have a productivity problem.Though the small-cap mark obtained 10.1% in July, it's dropped around 4% so far in August, since Thursday morning.ALPS' Paul Baiocchi chalks up the inconsistent relocate to the index's overall composition, along with an estimate coming from Beauty Global showing 40% of those business possess damaging incomes." [Financiers] have primarily surrendered themselves to the truth that by remaining in the Russell 2000, I'm merely going to have to take the great along with the bad," the organization's principal ETF planner informed CNBC's "ETF Edge" this week.To prevent the productivity drag, Baiocchi advises entrepreneurs focus on top quality providers, considering even more discerning exchange-traded funds such as his organization's mountain range O'Shares united state Small-Cap High Quality Dividend ETF Portions (OUSM)." The suggestion is top quality companies that pay out as well as develop their rewards, and also importantly, have a lot less volatility than their peers," he mentioned. "It makes it possible for consultants and capitalists that have actually found small hats go sideways for 5 years to be assigned to a group that's delayed." In addition to its success display, the fund includes just 107 stocks u00e2 $" a portion of what's inside the Russell 2000. Its best three holdings are actually Tradeweb Markets, Juniper Networks and Old Republic International, each sitting at a roughly 2% weighting in the fund, every FactSet.Shares of the small-cap fund are actually down 1.5% month to date u00e2 $" exceeding the Russell through more than 2 percentage factors in that time.Disclaimer.