Australian hedge fund manager Regal Partners delivered strong returns in July across several of its strategies, buoyed by a large position in defence technology firm DroneShield, according to a report by the Financial Review.

The Atlantic Absolute Return Fund led performance with a 10.8% gain, citing broad strength in industrials, technology and healthcare, but with DroneShield highlighted as a “material positive contributor.” Regal attributed the stock’s rally to robust financial results, accelerating contract wins and expectations it will join the ASX 200 in September.

Other funds also benefitted, with the Australia Long Short Fund riseing 4.5%, outperforming the ASX 300 Accumulation Index (+2.4%), the Tasman Market Neutral Fund gaining 9.4%, with additional support from Pantoro, HUB24 and WiseTech Global, and the Emerging Companies Opportunities Fund posting a 1.6% return, with additive manufacturer Amaero and fintech Beforepay also contributing.

The Global Small Companies Fund meanwhile, advanced 5.7%, beating the Russell 2000 Index (+1.7%) thanks to strong earnings season plays including Sofi, Comfort Systems and Money Forward.

Not all positions worked in Regal’s favour though, with short bets on mining stocks a drag as commodity prices surged on expectations of Chinese stimulus. Losses from names including Gentrack, Imricor and Dimerix also partially offset gains.