The FTSE 100 is officially in correction territory, having fallen more than 10% since its all-time high reached in April, bringing exchange-traded funds such as the £3.5 billion London-listed iShares Core FTSE 100 UCITS ETF (ISF) down with it.

The underperformance of oil and mining shares has offset market gains in other sectors this year.

Oil and mining stocks have been the dominant detractor from performance this year as commodity prices have come under pressure.

This was epitomised by Glencore’s poor set of results this Wednesday with the company announcing a 29 percent drop in first-half earnings. This saw shares in the multinational commodity trading and mining company drop over 8%. Other miners in the index such as Rio Tinto, Anglo American and BHP Billiton each fell by around 4%.

Despite Germany signing off on the Greek bailout, wider concerns are having a greater effect on market direction and corporate earnings expectations. “Markets are looking east and don’t like what they are seeing. Slowing economic growth, currency devaluation, and stock market mayhem in China have hit commodities and mining stocks, and with them the UK stock market,” said Laith Khalaf, Senior Analyst, Hargreaves Lansdown.

The performance of oil and mining companies has a significant effect on the performance of the FTSE 100 as they make up around one fifth of the index. According to Hargreaves Lansdown, outside of these sectors, things are going much better. The year-to-date total return of the FTSE 100 has been 0.5%, but this number jumps to 4.8% if oil and mining stocks are excluded.

The long-term outlook for carbon-intensive industries may also come under pressure from increased scrutiny and regulation as governments look to tackle climate change. “With US President Obama having recently unveiled a major climate change proposal and senior politicians and business people planning to attend the 2015 UN Climate Change Conference in Paris this winter, the global dialogue on climate change is clearly gaining momentum,” said Kevin Bourne, Managing Director Database Services, FTSE Russell.

With this in mind, UK investors would be wise to consider the effect that the performance of these sectors has on the the FTSE 100 and determine whether they are comfortable with investments tied to the index.

A possible solution to the outsized effect that oil and mining stocks can have on the FTSE 100 index would be an equal-weighted allocation to its constituents. The FTSE 100 is a market cap-weighted index, meaning that companies with larger valuations constitute a larger portion of the index. For example, BP and Royal Dutch Shell (A and B shares) constituted over 11% of the index (as of 19 August 2015). An equally-weighted FTSE 100 index would allocate only 1% to each of these stocks. That would see the oil and mining exposure of the index drop from 19.2% to 12% (as of 19 August).

The recently launched db x-trackers FTSE 100 Equal Weight UCITS ETF (XFEW LN) is the only ETF currently available which gives an equal weighting to each of the constituents in the FTSE 100. 

Of course, the poor performance has been a boon for inverse ETFs, such as the Boost FTSE 100 3x Short Daily ETP (3UKS) which is up more than 26% since the April high.