Hedge funds generated a net return of 3.55% in October, the best month in almost two years and the fourth best month this century, according to initial results.

The 3.55% rise in the global hedge fund index just published by data provider Eurekahedge has lifted the overall hedge fund return to 15.27% for the first 10 months of the year. The index rose 14.33% for the whole of 2006.