DoubleLine Capital, which is overseen by closely watched investor Jeffrey Gundlach, said on Tuesday that it would launch the DoubleLine Long Duration Total Return Bond Fund to investors on Monday.

The new fund will invest primarily in agency mortgage-backed securities with an average effective duration of at least 10 years. Duration is a bond's sensitivity to interest rate fluctuations, and going longer on duration is an investment strategy when rates are expected to remain low or drop further.

Gundlach, who co-founded DoubleLine in December 2009 and who will be manager of the Long Duration Bond Fund with portfolio manager Vitaliy Liberman, has said all year that he does not see interest rates rising sharply. The yield on the 10-year Treasury note is trading at 2.23 percent, down from 3 percent at the start of the year.

That said, Gundlach said in an interview on Tuesday: "The fund launch is not a statement about future market direction. The fund launch is a continuation of our ongoing build-out of our mutual fund suite."

DoubleLine manages several low-risk funds, which investors can choose if they are concerned about rising rates, and several intermediate funds that provide broad bond-market exposure, he said.

"The new fund offers investors a long-maturity fund which investors who want or need long maturity can choose for that exposure," he said.

While bond yields are low, "one can observe that stocks are at an all-time high and cash yields zero," Gundlach said. "I suspect if we launched an energy fund, questions would come in as to why we are launching such a fund with energy prices collapsing."

DoubleLine may invest up to 20 percent of total assets in securities rated below investment-grade and unrated securities it believes to be of comparable credit quality.

The firm said it would normally limit its foreign currency exposure, from non-U.S. dollar-denominated securities or currencies, to no more than 30 percent of total assets. The fund may invest without limit in U.S. dollar-denominated securities of foreign issuers.

The fund may invest up to 25 percent of its total assets in obligations of sovereign or corporate issuers domiciled in emerging market countries.