If I am reading this right this swaps dividend income with capital gains (or losses) by selling the underlying assets. Aren't a lot of the dividends paid by S&P500 companies already qualified if you hold the stock long enough (which an index would since it's buy and hold by definition)?
While you pay the same tax rate on qualified dividends as you do on long term capital gains you can potentially save here by paying that tax later since you benefit from the compounding within the index on what you would otherwise have paid in tax in the current year until when you finally sell at a later date. You might also benefit from timing the sale in a year you have lower income (perhaps after retirement.)