The fund has been removed from Charles Stanley's Foundation list of funds, those it considers to be its highest conviction ideas. The Woodford Equity Income fund has been on the list since January 2015.
In a note to clients, Rob Morgan, a pension and investment analyst at Charles Stanley Direct, said the reason for its removal is due to concerns the performance of the giant fund is being negatively impacted by the Mr Woodford's determination to hold investments in unquoted companies.
There has been an uptick in the performance of the Woodford Equity Income fund in recent months, though it continues to lack its peer group.
The fund has returned 5 per cent over the past three months, compared to 8 per cent for the average fund in the IA UK All Companies sector in the same time period.
But on a twelve month basis, for the year to 21 May, the fund has lost 9 per cent, while the average fund in the sector has gained 9 per cent.
Mr Woodford has made a number of prescient calls about the outlook for the UK and global economy in recent years, including the view that the UK economy would fare better than expected in the year after the Brexit vote.
More recently he made a number of comments anticipating the current weakness in global economic data.
But those insights have yet to translate into markedly improved performance for the fund.
Mr Morgan praised Mr Woodford's "admirable record".
"He is one of the most talented and well-known fund managers in the UK, consistently strong in reading the economic picture and developments within industries. Many investors will want to back him to repeat his strong long term performance in the future.
"Indeed this may be a good time if he bounces back from what has been a tough period by his exceptionally high standards.
"He also deserves considerable credit for full disclosure of his funds’ underlying shareholdings and excellent communications surrounding the portfolio in good times and bad.
"Furthermore, he is genuinely offering the active stock selection and differentiation he promised."
But he added: "Despite this we have begun to harbour some concerns that overall performance from this equity income fund may become increasingly impacted by a relatively small number of existing high growth and earlier-stage businesses in the portfolio”.
“Our level of discomfort that the positive factors could be outweighed by more limited options in terms of the make-up and diversification of the higher growth part of the fund is small. We still believe it is a high quality fund and following a tricky period there may be considerable potential in the portfolio as it currently stands.
"Yet the Foundation Fundlist is reserved for our highest-conviction investment ideas, so we feel it is right to remove the fund from the list at this juncture while we monitor it further and explore various options within the UK equity income sector”
The funds now held on the Charles Stanley Direct favourite funds list are: Fundsmith Equity, L&G US Index Trust, Old Mutual UK Smaller Companies, JOHCM UK Equity Income, Man GLG Undervalued Assets, Invesco Perpetual Asian, Artemis Global Income, BlackRock European Dynamic, Fidelity Index World, and the M&G Global Dividend fund.
Investors such as Jupiter and Architas have withdrawn money from Mr Woodford's funds over the past year due to concerns about performance.