(Adds DWS statement in second-to-last paragraph)

By Herbert Lash

NEW YORK, April 17 (Reuters) - David Dreman, a noted Wall Street value investor who was fired early this month by DWS Investments as the manager of one its funds, could be finding vindication of sorts in the fund's recent jump.

The DWS Dreman High Return Equity Fund KDHAX.O, which Dreman has managed for more than 20 years, has been on a tear ever since DWS, the asset management arm of Deutsche Bank AG (DBKGn.DE: Quote, Profile, Research), said on April 2 it would replace Dreman.

In the second quarter through Thursday the fund has gained 13.4 percent, almost double the 8.6 percent rise in the total return of the benchmark Standard & Poor's 500 Index .SPX.

Dreman, a contrarian investor who buys out-of-favor stocks trading at low price-to-earnings ratios, has written three books on investment psychology that examine how investors, swayed by the sentiment of the market, buy or sell securities at the wrong time and price.

Dreman, like other deep value investors, was slammed last year for taking big positions in Fannie Mae (FNM.P: Quote, Profile, Research) and Freddie Mac (FRE.P: Quote, Profile, Research). The shares of the two housing finance companies later lost nearly all their value after the government seized the companies, which have been at the center of the financial crisis spawned by the deep housing slump.

"Everybody had their personal devils last year," Dreman said in an interview on Friday. "There is nobody that is not going to have a couple of bad years or be down some."

High Return Equity fell 43.3 percent over the past 52 weeks, ranking it at the bottom 97th percentile of its peers, according to Lipper Inc., a unit of Thomson Reuters.