Dividend income funds and high dividend yielding funds (eq. Satrix Divi) are different beasts. Dividend income funds were created to provide tax efficient income streams. This was done by essentially investing in fixed income assets, and swapping out their interest yield for dividends earned by pension funds, as pension funds are not taxed. Obviously the pensions funds charged an small fee for the privilege of accessing the dividend stream while receiving an interest stream in return (tax free for them, plus a fee that that they charged). Under the old dividend tax regime, investors in dividend icome funds would thus receive the dividends from the fund, which would be tax free in the invesotr's hands. SARS has closed this apparent loophole and hence the closure of dividend income funds. There are UT funds that follow a high dividend yield approach to investing and invest in a portfolio of high dividend yielding stocks (a value strategy) - Satrix Divi for example.
