The fund was suspended on June 3 after a rush of redemptions from clients eager to take their cash out of what has been the worst performer in the IA UK All Companies sector over the past three years.
The withdrawal request by the Kent County Council pension fund of its £255m investment, coming in the wake of outflows of £9m every working day through April, meant Mr Woodford needed to sell stock to meet those redemption requests.
He has now suspended the fund for an initial 28 days to sell off some of his illiquid holdings.
In the letter, Mr Woodford apologised for the fund being suspended and acknowledged it had happened because of his investment philosophy.
He said: "It is not a decision that has been taken lightly, and we fully understand the concern and frustration this will have caused within your client base. However, we believe that it is in the best interests of investors in the fund.
"The performance of the fund has been disappointing for some time. This under-performance has, in part, been the product of some company-specific issues within the portfolio, but I have also been battling against a momentum-driven market, where a narrow band of stocks in which I have chosen not to invest have driven market returns in a largely valuation-insensitive manner.
"These market conditions have persisted for far longer than I had expected and, as a result, the fund has not captured the benefits of a steadily rising market."
He said suspending the fund meant he could obtain better sale prices, as he would not be a forced seller of stock.
Mr Woodford said the fund would soon look very different to the portfolio that had underperformed in recent years, with the removal of the less liquid investments and investments in private companies, with the portfolio instead being focused on larger companies.
He wrote: "When the fund re-opens, investors will see a much more liquid portfolio, but one which reflects the same investment strategy. It will continue to demonstrate a strong and selective bias towards undervalued companies that are exposed to the UK economy.
"The global economy is evidently slowing and this represents a considerable near-term challenge for equity markets. The UK is one of the few regional economies that has enough internal momentum to withstand the growing global headwinds. At the same time, many companies that generate most of their revenues from the UK economy are as cheap as I can ever remember.