Federated Government Fund
(A Portfolio of Federated Total Return Series, Inc.)
Institutional Shares
Institutional Service Shares
Supplement to the prospectuses dated November 30, 1997
The following information is a supplement to your prospectus dated November 30,
1997. We're providing it to advise you of a change in the name of Federated
Government Fund and a change to the Fund's non-fundamental investment policy
that were recently approved by the Fund's Board of Directors. Both of these
changes are effective as of June 30, 1998.
1. Effective June 30, 1998, Federated Government Fund will be renamed Federated
Mortgage Fund. All references in your prospectus to Federated Government Fund
should be changed to Federated Mortgage Fund.
2. Please delete the first five sentences of the sub-section entitled
"Investment Policies" under the section entitled "Investment Information" on
page 3 of the prospectus, beginning with "The Fund pursues this investment
objective..." up to and including "...these investment policies become
effective." and replace with the following:
"The Fund pursues this investment objective by investing in
mortgage-backed securities. Under normal circumstances, the Fund will
invest at least 65% of the value of its total assets in mortgage-backed
securities. Mortgage-backed securities may be issued by agencies or
instrumentalities of the U.S. government or by private entities. Unless
indicated otherwise, the investment policies may be changed by the
Directors without the approval of shareholders. Shareholders will be
notified before any material change in these investment policies becomes
effective."
3. Please delete the sub-section entitled "Acceptable Investments" under the
section entitled "Investment Policies" on page 3 of the prospectus in its
entirety and replace it with the following:
"The securities in which the Fund invests include :
direct obligations of the U.S. Treasury, such as U.S. Treasury bills,
notes, and bonds;
notes, bonds, discount notes and mortgage-backed securities issued or
guaranteed by U.S. government agencies and instrumentalities supported by
the full faith and credit of the United States;
notes, bonds, discount notes and mortgage-backed securities of U.S.
government agencies or instrumentalities which receive or have access to
federal funding;
notes, bonds, and discount notes of other U.S. government instrumentalities
supported only by the credit of the instrumentalities;
asset-backed securities and commercial mortgage securities rated BBB or
better by Moody's Investors Service, Inc. ("Moody's"), Standard & Poor's
Ratings Group ("Standard and Poor's"), or Fitch Investors Service, Inc.
("Fitch"), or which are of comparable quality in the judgment of the
adviser; and
mortgage-backed securities issued by private entities (including commercial
and residential mortgage-backed securities, and home equity loan
securities).
The prices of fixed income securities fluctuate inversely to the direction
of interest rates."
4. Please delete the sub-section entitled "Asset-Backed Securities" under the
section entitled "Investment Policies" on page 5 of the prospectus in its
entirety and replace it with the following:
"Asset Backed Securities
Asset-backed securities have structural characteristics similar to
mortgage-backed securities but have underlying assets that generally are
not mortgage loans or interests in mortgage loans. The Fund may invest in
asset-backed securities including, but not limited to, interests in pools
of receivables, such as motor vehicle installment purchase obligations and
credit card receivables, equipment leases, or manufactured housing (mobile
home) leases. These securities may be in the form of pass-through
instruments or asset-backed bonds. The securities are issued by
non-governmental entities and carry no direct or indirect government
guarantee."
June 30, 1998
Federated Securities Corp., Distributor
Federated Investors, Inc.
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
1-800-341-7400
Cusip 31428Q804
Cusip 31428Q887
G02368-01 (6/98)
FEDERATED GOVERNMENT FUND
(A Portfolio of Federated Total Return Series, Inc.)
Institutional Shares
Institutional Service Shares
Supplement to the Combined Statement of Additional Information dated
November 30, 1997
1. Effective June 30, 1998, Federated Government Fund will be renamed Federated
Mortgage Fund. All references to Federated Government Fund in your combined
Statement of Additional Information should be changed to Federated Mortgage
Fund.
2. Please replace the first sentence under "Types of Investments" on page 1 with
the following:
"The Fund will invest primarily in mortgage and mortgage-backed
securities."
June 30, 1998
[GRAPHIC OMITTED]
Federated Securities Corp. is the distributor of the Fund
and is a subsidiary of Federated Investors Inc.
Cusip 31428Q804
Cusip 31428Q887
G02368-02 (6/98)
