How do turnover caps change portfolio construction?

Turnover caps stop the optimizer from pretending every good-looking update deserves a trade. Once a cap exists, the portfolio has to spend its trading capacity where expected improvement is highest, which often changes the preferred weights, thresholds, and even the set of sleeves you are willing to include.

Cost-aware portfolios often look calmer than frictionless ones. They may hold positions longer, size down the noisiest sleeves, or prefer slower but more reliable exposures over strategies that only look attractive when the rebalance engine is assumed to be free.

Check whether the cap is improving net behavior or merely hiding weakness. A good cap should lower wasteful churn without turning the portfolio into a slow-moving version of a strategy that really needed to react faster.