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Abnormal Returns asks whether investors can get past their Bill Miller obsession, and links to two articles (here and here ) that discuss the legendary mutual fund manager’s return to form this year, after a lousy couple of years.

But we think that the amount of ink devoted to Mr. Miller has less to do with obsession and more with the fact that he is a human symbol in the ongoing debate over actively managed mutual funds against passive index investing.

Let us explain. After fees are factored into performance, the average return on an actively managed fund rarely beats its underlying benchmark index. That’s because the combined value of mutual funds represents a massive portion of any index. In essence, mutual funds are the index, and they can’t all outperform all the time. The better bet: Just buy a cheap index fund, which passively tracks a basket of stocks.

Mr. Miller, who manages the Legg Mason Value Trust fund (sold only to U.S. investors), stood out among his peers, beating the S&P 500 for 15 consecutive years – from 1991 until 2005 – and giving defenders of actively managed mutual funds a reason to believe that truly smart managers can and do provide value.

His performance slipped in 2006 and 2007, lagging the S&P 500. Then, in 2008, after buying up stocks like Bear Stearns Cos. and Freddie Mac as they tumbled, his fund sank 55.1 per cent – an amazing 18 percentage points worse than the S&P 500. His underperformance attracted some vicious criticism .

So far in 2009, his fund has again begun to outperform the index. At the end of June, according to Morningstar, the Value Trust fund was up 14 per cent, or nearly 11 percentage points better than the S&P 500. Is he a hero again?

Our conclusion: Mr. Miller is like most mutual fund managers. He’s smart and capable, and his fund will have good years and bad years, providing plenty of grist in the active-against-passive investing debate.