The shares of the consumer and payday loan lending business dropped by over 60 per cent in a day last week as it issued a profit warning and its chief executive departed.
Mr Woodford said in his most recent update to shareholders that he retains faith in the shares.
His former colleague at Invesco Perpetual, Mark Barnett, is also a fan.
Combined their separate holdings across all of their funds sees them own 40 per cent of the company.
Provident Financial remains the fourth largest holding in the £10bn Woodford Equity Income fund.
The practical impact of the demotion of the company is that it becomes a FTSE 250 stock, so the shares will no longer be bought by FTSE 100 tracker funds, which should mean fewer passive buyers of the shares.
Royal Mail has also been demoted from the FTSE 100.
The United Arab Emirates based NMC Healthcare and house builder Berkeley Group have been promoted to the FTSE 100 in their place.
Northgate, Petra Diamonds and outsourcing firm Carrilion have been demoted from the FTSE 250, to be replaced by gambling company 888 Holdings, Alfa Financial Holdings and the Sequoia Economic Infrastructure Income Fund.
Nicholas Hyatt, equity analyst at Hargreaves Lansdown said: “Royal Mail has lost its struggle to maintain a place in the FTSE 100. We’re not sure that’s something you can lay at CEO Moya Green’s door though, as the group continues to face tough market conditions.
"Letter volumes have seeped away faster than the group had expected, partly as a result direct marketing drying up as business confidence slumped after the EU referendum, while pricing remains tough in parcels.”
“Relegations for Carillion and Provident Financial will come as no surprise.
"Both have plummeted following eviscerating profits warnings, largely of management’s own making.
"Carillion fell foul of the outsourcers’ kryptonite, bidding too aggressively for contracts that ultimately proved loss making.
"Meanwhile Provident managed to botch an organisational revamp to such an extent that a 137 year old business, which was robustly profitable last year, is now facing losses of up to £120m.”