So sharesies kids accounts are up and running now. I'm a bit confused, sos if anyone could advise that would be great.

They have a few investments that are recommended for kids because of the tax advantage being PIR and the tax rate can be 10.5%, but they are managed funds and most of them don't pay dividends, so you are relying on growth. Where if you invest in an index fund they pay a flat rate of 28%. Which from my understanding is you can apply for tax credits, which goes against their tax account and offsets income once they start earning, which for my daughter is a way off, she is only 12.
I personally prefer index funds myself, but are the recommended ones a better option for my daughter?
Also they say for dividends that: "Any distributions paid by the companies are retained by this fund". What does that mean, if there are any dividends paid who gets them. I can understand a business retaining earning so they can grow the business, but a fund is different surely?