In addition to earning a certain income by borrowing coupons, the cost of exempting rates can actually bring more benefits to Fidelity as a whole than some marketing.

Ben johnson, an analyst at Morningstar, believes that Fidelity's zero-rate strategy is equivalent to some kind of bait and a marketing tool. He believes that Fidelity can use these two well-known products to attract investors into its trading platform, so as to buy and sell products that still have management fees and transaction costs to earn income.

Johnson pointed out that, for example, just like providing free milk at the back of a department store, customers have to go through many shelves to get free milk. Finally, customers may not only take away free milk when they check out, but also take away other goods with higher profit margins.

In fact, zero-rate funds are not the only magic weapon for Fidelity to attract investors into its trading platform. At the same time, Fidelity also reduced the rates of other funds. Fidelity said that they reduced the management cost of existing stock and bond index funds by 35% according to the asset weight, which will save existing investors $47 million in management fees every year. In addition, Fidelity has lowered the minimum investment threshold, exempting account opening fees and domestic fund transfer fees. This series of measures is to hope that investors can stay in Fidelity Fund System and its investment platform.

In addition, the biggest source of income for zero-interest funds may be borrowing bonds. Bloomberg estimates that zero-interest funds can earn 1 to 2 basis points from borrowing bonds. Although Fidelity clarified that the company has not earned income from borrowing bonds at present, this does not mean that it will not profit from it in the future. Fidelity also tried its best to reduce the cost of these two products, such as using its own index, without paying the third party for using the index. In this way, even if you don't make money from borrowing securities, you can keep the loss at a small level, which is equivalent to some form of marketing expenses.

Buck Kanters, an analyst at Bloomberg, pointed out that Fidelity's annual revenue is about $654.38+08 billion, which is twice that of the entire ETF industry and four times that of Pilot. In addition, Fidelity also has many ultra-cheap index funds, such as the rate is only 0.0 15%. Therefore, this zero-rate fund is actually equivalent to making a very beautiful advertisement with 1 basis point, in exchange for the expected capital inflow and new customers in the near future.