Morningstar analyst Peter Brunt said the Woodford’s “relentless willingness to push the portfolio to its liquidity limit” had also contributed to the downgrade for the Woodford Equity Income fund.

A Neutral rating implies that the analyst does not have a strong conviction on a fund and doesn’t expect it to deliver standout returns. This will disappoint those who have remained loyal to Woodford through a difficult period of performance that has seen assets more than halve from a peak of £10.2 billion to £4.3 billion.

Last week Kent County Council, which has 4% of its pension assets invested in the fund, said it was reviewing its holding. Earlier this month, Woodford said he would reduce the proportion of the fund investment in illiquid and less liquid stocks to less than 10% by the end of the year and eventually to zero.

Dzmitry Lipski, investment analyst at interactive investor says: “There’s a well known saying that there’s no sense closing the barn door after the horse has bolted, and contrarian investors might want to bear this in mind. Three years ago was arguably the time to sell, when performance was at the top of its game and profit taking would have been a sensible strategy.

“While Woodford’s reputation may still be swinging on the hinge, the fund today is very different to where it was three years ago. The barn has had a thorough sweep, with unquoted stocks transferred to Patient Capital Trust, with a closed-ended structure much better suited to illiquid assets. This should help reduce risks and provide more clarity to investors.

“While we still think there are better options, existing investors in Woodford Equity Income Fund could blend them with other high-quality funds in the sector to gain broader, more balanced exposure to UK equity income.” Lipski recommended the Super 60 core fund Royal London UK Equity Income and the low cost Vanguard FTSE UK Equity Income Index.