In theory, it should be possible to run a break-even fund, where your expenses are offset by lending shares in the stock borrow lend (SBL) market. I assume this is how some fund managers can offer 0% fees. I have no idea if this is sustainable long-term (decades). In a very competitive, liquid market like the US, I guess that weighted-average SBL rates on basket of S&P 500 stocks might be 5-10bps. Can any SBL traders here give us more accurate numbers?

Edit:

Also, they can sell their order flow to a market maker (HFT?), as it is non-toxic retail flow. That is basically how Robin Hood keeps fees so low.

I believe it is a loss-leader. But these days companies get a pretty direct payout from people who accidentally hold cash in their investment account while on the way to buy ETFs

Loss leader. Fidelity and Schwab make a lot of money from Net Interest Margin on uninvested cash (or e.g. Fidelity's relatively high fee 0.42% money market funds).