Bill Miller is back with a vengeance, thrashing the market again though he's taking some pretty big risks in doing so.
The legendary portfolio manager's Miller Opportunity Trust mutual fund is up a gaudy 13.9 percent this year, easily beating the S&P 500's return of 7.8 percent including dividends, according to Morningstar. That puts the $1.4 billion security in the rating firm's top 1 percentile in its category.
The big play: Options on Apple that gave the fund the chance to buy and turn a profit if the stock passed $100 a share and were purchased when the shares were just short of that target, or "strike" as it is known. Of course, the stock was trading around $153 a share Wednesday afternoon and is up 32 percent in 2017 alone, making the options play a strong move.
Miller is best known for his record-setting feat of topping the market benchmark for 15 years straight between 1991 and 2005. By contrast, only about 1 in 5 managers surpassed index returns just in 2016.
However, in the ensuing years his record was spotty, particularly through the financial crisis and again in 2010-11. He has since ended his long-term relationship with Legg Mason and gone out on his own with the Opportunity fund.
The recent performance of the fund shows that anyone who thought Miller's best days were behind him were mistaken, though analysts worry that the fund has little protection should the market turn south.