The appreciation of exchange rate may have a depreciation effect on the investment of sovereign wealth funds in China. First, sovereign wealth funds usually hold assets of other countries or regions, including foreign exchange reserves, stocks and bonds. When the exchange rate appreciates, the local currency will appreciate relative to other currencies, which means that the foreign currency assets held by the fund will depreciate in the local currency. Therefore, if the assets held by sovereign wealth funds are mainly denominated in foreign currencies, the appreciation of exchange rate may lead to the depreciation of fund investment.

On the other hand, exchange rate appreciation will also affect China's economy and international trade. When the exchange rate appreciates, the value of the domestic currency increases relative to other currencies, which is not good for export enterprises, because the competitiveness of their products in the international market may decline, thus affecting the company's performance and profitability. If the enterprises invested by sovereign wealth funds are mainly export-oriented enterprises, the decline in their performance may also lead to the depreciation of fund investment.

To sum up, the appreciation of exchange rate may have a depreciation effect on the investment of sovereign wealth funds in China. The specific situation also needs to consider the types of assets held by the fund, geographical distribution, sensitivity to exchange rate changes and other factors. Different investment portfolios may have different risks and returns, so it is necessary to comprehensively consider various factors to make investment decisions.