A dividend capture fund employs an investment strategy whereby it invests in high yielding stocks before the ex-dividend date and exits the investment after the dividend has been paid. This strategy is particularly attractive for US investors which are eligible for 15% discounted tax rate (full rate 35%) if the stock is held for more than 61 days.
An investor looking for more regular income can in effect receive up to 6 dividend payments (365/61) per year using this strategy compared to a long position on a typical quarterly dividend paying stock.