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Is it too late to jump on the 'Bond Wagon'?

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With equities taking a hammering in European markets and as Eurozone woes multiply, investors are as ever being urged to diversify. Is it too late to jump on the 'Bond Wagon'? Simon Fasdal, Head of Fixed Income Trading at Saxo Bank looks into the opportunities available, especially in Emerging Markets whwre sure there's risk but it's perhaps clearer to assess than in Europe and the US. 

As Simon points out: "The major concern is to pick the right regions, sovereigns and corporates in the portfolio selection. US corporates seemed a strong bet going into 2014, agreed. But EM bonds had one ability (and still have) that is superior to all others – namely, significant and measurable risk premium (yield) which in relative value terms seems very attractive.
Of course, the risk premium is justified because there is substantial risk factors in EM: lower growth, structural reforms and fear of lower commodity prices and higher US yields (though the last two are contradictive) to mention a few.
But, as most worst-case scenarios in January 2014 focused (rightly) on the risk of deflation and continued weak growth in Europe, this kind of risk premium in yield terms was like finding water in the desert. The big trick here is that when yields and inflation become so low in Europe (or the US, for that matter), the relative value between EM and developed market multiplies the attractiveness of EM bond risk premiums."