Bill Miller's Housing Spree Pays Off

His Opportunity fund leads the pack with bets on homebuilders
Photograph by Tim Boyle/Bloomberg

Bill Miller, who beat the Standard & Poor’s 500-stock index at Legg Mason’s Value Trust for 15 years through 2005 before falling into a deep slump, is seeking redemption as a housing bull. Miller’s Legg Mason Capital Management Opportunity Trust has bet about a third of its holdings on a property rebound through homebuilders, mortgage real estate investment trusts, and loan insurers. The move has propelled the $945 million fund to a return of 30 percent this year through Oct. 15, surpassing 99 percent of its peers, according to data compiled by Bloomberg. “Housing fundamentals are likely to be positive for years,” says Miller, 62. “The stocks have run, but in our judgment are not even close to reflecting that long cycle.”

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