While the fund returned a positive 3.29% for the calendar year, this was a long way off the 16.75% return from the FTSE All-Share index and is short of the manager’s stated aspiration of high single annualised returns.

Woodford attributed the underperformance to momentum-driven stock markets, which he said did not appear to be grounded in fundamentals. In addition he said in the post-Trump environment company valuations have become irrelevant, combining to make “a testing time for active managers”.

However the ex-Invesco Perpetual manager stated these conditions always represent the best opportunities to add long-term value.

“Despite the challenging market conditions we have witnessed and some surprising political events, nothing we saw last year persuades us that the portfolio should be positioned differently,” he said.

“The narrow momentum-driven rally that we have seen has added risk to certain parts of the market. In particular we continue to avoid the oil & gas and mining sectors where, despite the rally in commodity prices, dividends are still vulnerable and the fundamental backdrop for prices remains weak. This positioning was unhelpful in 2016 but we’re convinced it’s still appropriate to avoid them.

“Instead, the portfolio remains positioned towards attractively-valued businesses with significantly more control over their destiny. This control, generally speaking, has delivered some considerable positive progress in 2016 and this progress will ultimately be reflected in share prices, when fundamentals reassert themselves as the predominant influence of share price behaviour. As such, we look forward to 2017 and the years beyond with great confidence.”

Mark Dampier, head of research at Hargreaves Lansdown, said while the underperformance was disappointing, it is important to put it into a wider context.

“It is, in my view, impossible for a truly active manager to outperform in every period, and this shows the benefit of having a broad and diversified portfolio,” said Dampier. “Woodford is a high conviction, long term investor and like other managers, he will undergo periods where his style is out of favour and we will see underperformance testing his and investor’s resolve.

“Woodford believes that if you stick with companies with good fundamentals the value for investors will come through. This has worked throughout his career and I continue to have faith in him as a manager to add value for investors over the long term.”