As Wall Street begins to calculate the first damage done to the global market by sanctions against Russia following the start of its special operation in Ukraine, a large U.S.-based bond fund managed by Franklin Resources Inc. was among the early losers, Bloomberg writes.

The Western Asset Core Plus Bond Fund, which has $37 billion in assets, is down more than 8% YTD and about 3% since the conflict began. Its losses were due to reputational reasons: investments in Russian securities that gave the fund unwanted publicity.

At the beginning of this year, the U.S. fund had $484 million in Russian bonds, a fairly small fraction – 1.2% of its total assets. Those positions were then cut by more than half to $194 million as of Feb. 28, but could shrink further after additional sanctions and restrictions were imposed on Russia.

The fund has lagged its benchmark index by more than 3 percentage points this year.

Western Asset Core Plus suffered losses mainly because of its high exposure to emerging-market bonds, including Russian domestic debt and the ruble.

The fund’s fall shows how Russia’s special operation and its consequences are spreading to the financial market: some of the largest global wealth managers have stopped trading exchange-traded funds, and index providers have excluded Russian securities from the benchmarks used by investors.

Several large hedge funds and other asset management firms also suffered serious losses. Due to military action and sanctions, several Russian assets became unavailable for sale, and severe volatility in the betting market began. As a consequence, US and European bond yields fell sharply due to demand for safe haven assets.