mutual fund that invests in small firms with the primary objective of earning tax-advantaged income is called

The mutual fund that invests in small firms with the primary objective of earning tax-advantaged income is typically referred to as a Small-Cap Growth Fund. These funds specifically focus on small-cap companies that are anticipated to grow at an above-average rate compared to their industry peers.

Investors are often attracted to small-cap funds because they can offer significant growth potential, as smaller companies may have more room to expand compared to their large-cap counterparts. Furthermore, if the fund is structured in a way to provide tax-advantaged income—such as being organized as a regulated investment company (RIC)—it can help investors minimize their tax liabilities on dividends and capital gains.

These funds are suitable for investors seeking higher returns and who are willing to take on more risk, given that smaller firms can be more volatile. Overall, investing in small-cap growth funds can be an effective strategy for growing wealth over time while benefiting from potential tax advantages.