FEDERATED TOTAL RETURN SERIES INC, N-30D, 2000-05-30

FEDERATED TOTAL RETURN SERIES INC
N-30D, 2000-05-30

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SEMI-ANNUAL REPORT

President's Message

Dear Investor:

I am pleased to present the Semi-Annual Report to shareholders for Federated Limited Duration Fund, a portfolio of Federated Total Return Series, Inc. The report covers the six-month period from October 1, 1999 through March 31, 2000 and includes commentary by the fund's portfolio manager, followed by the portfolio of investments and financial statements.

During the reporting period, the fund's diversified portfolio of investment grade, limited duration bonds produced a total return of 2.60%¹ for Institutional Shares and 2.44%¹ for Institutional Service Shares. Dividends paid by the fund during this reporting period totaled $0.34 per share for Institutional Shares and $0.33 per share for Institutional Service Shares. The fund's total net assets reached $85.2 million on the last day of the reporting period.

Thank you for participating in the conservative income opportunities of Federated Limited Duration Fund. As always, we welcome your questions and comments.

Sincerely,

Glen R. Johnson

Glen R. Johnson
President
May 15, 2000

Investment Review

Federated Limited Duration Fund represents a high quality, fixed income portfolio combining the various fixed income asset classes. Investments are concentrated in U.S. Treasury, government agency, asset backed, mortgage backed, and high quality corporate debt securities. The fund may also allocate a small percentage of assets, 15% combined, in either or both of the high yield corporate and international bond sectors.¹

The reporting period was characterized by uncertainty if nothing else. The Year 2000 ("Y2K") malaise which had caused credit markets to do poorly beginning in the first half of calendar 1999, had pretty much run its course by the middle of October. As investors slowly began to realize there would be no great dislocation attributable to Y2K, credit markets actually began to rally. Investors who had stayed on the sidelines tried to invest without success, since issuers had already completed their funding requirements through year-end. Credit spreads tightened versus U.S. Treasury Securities, and this phenomenon lasted until approximately mid-February 2000. At that point however, spreads once again began to widen. A combination of equity market volatility, Treasury buybacks and investors uncertain as to how to deal with an economy in uncharted growth waters seemed to be the culprit. This is the current environment as the fund moves into the middle of the year 2000.

From the standpoint of investor outcome, the fund handled the market's gyrations reasonably well. The fund returned 2.60%² for Institutional Shares and 2.44%² for Institutional Service Shares for the six-month reporting period ended March 31, 2000, compared to a 1.86% total return for the Merrill Lynch 1-3 Year Government Bond Index³ and a 2.24% total return for the Merrill Lynch 1-3 Year Corporate Bond Index.⁴ One of the biggest contributors to performance was the improvement of the subordinate asset backed securities market, a sector which had lagged substantially for the better part of the prior two years. The fund's performance is also encouraging in light of the poor performance of the corporate bond market in the latter stages of the reporting period under review.

The fund's current posture would be considered neutral to slightly negative with regard to interest rate risk exposure, and neutral with regard to credit exposure. The combination of AAA-rated securities and the fund's cash position comprised over one-half of assets at March 31, 2000, with just over 7% of the fund invested in non-investment grade assets. Since fund management believes that the Federal Reserve Board will maintain a fairly aggressive bias toward higher federal funds rate targets, management feels it is better to maintain a more conservative posture with regard to duration. With regard to sector allocation, asset backed securities continue to receive the largest amount of fund exposure, followed by corporates. Mortgage backed securities are being de-emphasized in favor of like-duration asset backed securities, which are perceived to have better convexity characteristics. Mortgage backed securities currently account for less than 20% of fund exposure.

1 Special risks are associated with investments in high yield and international securities.

2 Performance quoted represents past performance and is no guarantee of future results. Investment return and principal value will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than their original cost.

3 The Merrill Lynch 1-3 Year Government Bond Index is an unmanaged index tracking short-term U.S. government securities with maturities between 1 and 2.99 years. The index is produced by Merrill Lynch, Pierce, Fenner & Smith, Inc. Investments cannot be made in the index.

4 The Merrill Lynch 1-3 Year Corporate Bond Index is an unmanaged index tracking investment grade corporate debt securities with maturities between 1 and 2.99 years. The index is produced by Merrill Lynch, Pierce, Fenner & Smith, Inc. Investments cannot be made in the index.

Portfolio of Investments

MARCH 31, 2000 (UNAUDITED)

Principal
Amount

Value

ASSET-BACKED SECURITIES--48.9%¹

Automobile--14.3%

367,475

AFG Receivables Trust 1996-D, Class A, 6.10%, 10/15/2001

366,435

54,792

AFG Receivables Trust 1997-A, Class C, 7.20%, 10/15/2002

54,904

46,551

AFG Receivables Trust 1997-B, Class C, 7.00%, 2/15/2003

46,573

1,500,000

BMW Vehicle Owner Trust 1999-A, Class A3, 6.41%, 4/25/2003

1,491,870

1,500,000

Bay View Auto Trust 1999-LG1, Class A3, 6.91%, 3/15/2004

1,494,345

305,201

CIT RV Trust 1994-A, Class A, 4.90%, 7/15/2009

302,767

50,000

Chase Manhattan Auto Owner Trust 1997-A, Class A5, 6.50%, 12/17/2001

49,942

814,567

Key Auto Finance Trust 1999-1, 7.08%, 1/15/2007

799,166

2,000,000

Mellon Auto Grantor Trust 2000-1, Class B, 7.43%, 10/15/2006

1,998,760

2,000,000

Nissan Auto Receivables Owner Trust 1999-A, Class A3, 6.47%, 9/15/2003

1,983,770

221,044

^{2, 3}

Paragon Auto Receivables Owner Trust 1998-A, Class B, 7.47%, 11/15/2004

215,469

536,885

^{2, 3}

Paragon Auto Receivables Owner Trust 1998-B, Class B, 7.03%, 3/15/2005

518,795

816,056

Paragon Auto Receivables Owner Trust 1999-A, Class A, 5.95%, 11/15/2005

803,713

50,000

^{2, 3}

Team Fleet Financing Corp. Series 1997-1, Class B, 7.80%, 5/15/2003

48,547

1,500,000

Toyota Auto Receivables 1999-A Owner Trust, Class C, 6.70%, 8/16/2004

1,495,950

154,820

Toyota Auto Receivables Grantor Trust 1997-A, Class A, 6.45%, 4/15/2002

154,913

204,568

World Omni Automobile Lease Securitization Trust 1997-A, Class A3, 6.85%, 6/25/2003

204,568

150,000

Yamaha Motor Master Trust 1995-1, Class A, 6.20%, 5/15/2003

149,363

TOTAL

12,179,850

Credit Card--10.8%

116,762

^{2, 3}

Banco Nacional de Mexico S.A., Credit Card Merchant Voucher Receivables Master Trust Series 1996-A, Class A1, 6.25%, 12/1/2003

113,223

250,000

Circuit City Credit Card Master Trust 1995-1, Class A, 6.375%, 8/15/2005

249,450

500,000

^{2, 3}

Circuit City Credit Card Master Trust 2000-1, Class CTF, 7.0775%, 2/15/2006

500,430

250,000

Citibank Credit Card Master Trust 1998-1, Class A, 5.75%, 1/15/2003

247,998

801,000

Citibank Credit Card Master Trust I 1998-6, Class A, 5.85%, 4/10/2003

793,439

215,000

Discover Card Master Trust I 1995-2, Class A, 6.55%, 2/18/2003

215,239

1,550,000

Fingerhut Master Trust 1998-2, Class A, 6.23%, 2/15/2007

1,517,496

260,000

First USA Credit Card Master Trust 1997-6, Class A, 6.42%, 3/17/2005

256,615

2,000,000

MBNA Master Credit Card Trust 1997-F, Class A, 6.60%, 11/15/2004

1,982,800

1,000,000

MBNA Master Credit Card Trust 1999-I, Class A, 6.40%, 1/18/2005

984,960

1,000,000

MBNA Master Credit Card Trust 2000-A, Class A, 7.35%, 7/16/2007

1,012,430

Principal
Amount

Value

ASSET-BACKED SECURITIES--continued

Credit Card--continued

285,000

Prime Credit Card Master Trust 1996-1, Class A, 6.70%, 7/15/2004

284,732

1,000,000

Proffitt's Credit Card Master Trust 1998-2, Class B, 6.15%, 9/15/2004

989,690

75,000

Spiegel Master Trust 1994-B, Class A, 8.15%, 6/15/2004

75,207

TOTAL

9,223,709

Home Equity Loan--14.2%

500,000

^{2, 3}

125 Home Loan Owner Trust 1998-1, Class B-2, 12.16%, 2/15/2029

423,984

74,384

Advanta Home Equity Loan Trust 1992-1, Class A, 7.875%, 9/25/2008

74,314

603

Advanta Mortgage Loan Trust 1997-1, Class A2, 7.10%, 4/25/2020

603

500,000

Amresco Residential Securities Mortgage Loan Trust 1996-1, Class A5, 7.05%, 4/25/2027

493,356

1,000,000

Cityscape Home Equity Loan Trust 1997-1, Class M1, 7.58%, 3/25/2018

975,045

1,475,047

Contimortgage Home Equity Loan Trust 1993-3, Class A2, 5.54%, 7/15/2020

1,392,998

36,468

ContiMortgage Home Equity Loan Trust 1997-3, Class A5, 7.01%, 8/15/2013

36,348

250,000

ContiMortgage Home Equity Loan Trust 1997-5, Class B, 7.62%, 1/15/2029

214,140

457,000

EQCC Home Equity Loan Trust 1997-2, Class A7, 6.89%, 2/15/2020

453,307

77,454

Green Tree Home Equity Loan Trust 1999-A, Class B2A, 7.44%, 2/15/2029

77,565

942,642

Green Tree Home Improvement Loan Trust 1995-C, Class B1, 7.20%, 7/15/2020

924,261

481,015

Green Tree Home Improvement Loan Trust 1997-C, Class B2, 7.59%, 8/15/2028

404,053

449,348

Headlands Home Equity Loan Trust 1998-2, Class A3, 6.67%, 12/15/2024

433,761

500,000

Independent National Mortgage Corp. Home Equity 1997-A, Class BF, 7.39%, 10/25/2028

474,219

1,000,000

Mellon Bank Home Equity Installment Loan 1999-1, Class B, 6.95%, 3/25/2015

933,970

303,411

NC Finance Trust 1999-1, Class B, 8.75%, 1/25/2029

290,706

1,000,000

Salomon Brothers Mortgage Sec. VII 1999-3, Class M3, 9.375%, 5/25/2029

1,000,000

1,500,000

Saxon Asset Securities Trust 1997-1, Class AF4, 7.76%, 2/25/2027

1,504,664

1,100,000

Saxon Asset Securities Trust 1997-1, Class BV, 7.025%, 4/25/2027

1,076,625

250,000

^{2, 3}

Saxon Asset Securities Trust 1998-1, Class BF2, 8.00%, 12/25/2027

221,313

500,000

Saxon Asset Securities Trust 1999-1, Class BV1, 8.875%, 2/25/2029

504,060

95,000

TMS Home Equity Trust 1996-B, Class A7, 7.55%, 2/15/2020

95,126

79,041

UCFC Home Equity Loan 1995-A1, Class A5, 8.55%, 1/10/2020

79,503

TOTAL

12,083,921

Manufactured Housing--6.1%

912,135

Bankamerica Manufactured Housing Contract Trust 1996-1, Class A3, 6.95%, 10/10/2026

913,841

250,000

Green Tree Financial Corp. 1996-2, Class B-1, 7.55%, 4/15/2027

244,712

Principal
Amount

Value

ASSET-BACKED SECURITIES--continued

Manufactured Housing--continued

62,039

Green Tree Financial Corp. 1996-4, Class A-4, 6.80%, 6/15/2027

62,093

1,250,000

Green Tree Financial Corp. 1997-3, Class B1, 7.51%, 7/15/2028

1,169,387

1,275,000

Merit Securities Corp. 12, Class 1, 7.98%, 7/28/2033

1,169,016

1,000,000

Merit Securities Corp. 13, Class A4, 7.88%, 12/28/2033

992,500

166,822

Oakwood Mortgage Investors, Inc. 1997-C, Class A2, 6.45%, 11/15/2027

165,993

500,000

Vanderbilt Mortgage Finance 1999-A, Class 2B2, 8.54%, 6/7/2016

492,050

TOTAL

5,209,592

Other--3.5%

98,166

Advanta Equipment Receivables 1998-1, Class C, 6.49%, 12/15/2006

97,447

680,108

Case Equipment Loan Trust 1999-A, Class B, 5.96%, 8/15/2005

666,428

200,000

Centerior Energy Receivables Master Trust 1996-1, Class A, 7.20%, 4/15/2002

200,644

1,000,000

Copelco Capital Funding LLC 1999-B, Class A3, 6.61%, 12/18/2002

995,025

200,000

Copelco Capital Funding Corp. X 1997-A, Class A4, 6.47%, 4/20/2005

199,171

140,703

Fleetwood Credit Corp. Grantor Trust 1996-B, Class A, 6.90%, 3/15/2012

139,931

613,000

Green Tree Home Improvement Loan Trust 1996-F, Class HIB2, 7.70%, 11/15/2027

572,444

75,891

NationsCredit Grantor Trust 1997-1, Class A, 6.75%, 8/15/2013

75,823

TOTAL

2,946,913

TOTAL ASSET-BACKED SECURITIES (IDENTIFIED COST $45,166,595)

41,643,985

COLLATERALIZED MORTGAGE OBLIGATIONS--17.1%¹

Commercial Mortgage--1.0%

100,000

^{2, 3}

K Mart CMBS Financing, Inc Series 1997-1, Class D, 7.013%, 3/1/2007

99,529

250,000

^{2, 3}

Nomura Depositor Trust Commercial Mortgage Pass-Thru Series 1998-ST I, Class A-3, 6.584%, 1/15/2003

245,742

500,000

^{2, 3}

Nomura Depositor Trust Commercial Mortgage Pass-Thru Series 1998-ST I, Class A-5, 7.254%, 1/15/2003

472,266

TOTAL

817,537

U.S. Government Agency--0.4%

405,000

Federal National Mortgage Association, Series 1993-32, Class H, 6.00%, 3/25/2023

368,684

Whole Loan--15.7%

394,542

^{2, 3}

Bayview Financial Acquisition Trust 1998-1, Class MII3, 7.575%, 5/25/2029

366,123

459,661

^{2, 3}

Bayview Financial Acquisition Trust 1998-1, Class MII4, 7.875%, 5/25/2029

425,545

704,013

Bear Stearns Mortgage Securities, Inc. 1996-8, Class B3, 8.00%, 11/25/2027

699,162

149,340

^{2, 3}

C-BASS ABS, LLC Series 1997-1, Class A-1, 6.049%, 2/1/2017

148,500

115,452

C-BASS ABS, LLC Series 1998-3, Class AF, 6.50%, 1/25/2033

108,633

1,348,532

^{2, 3}

C-BASS ABS, LLC Series 1999-3, Class B1, 7.15%, 2/3/2029

1,068,712

Principal
Amount

Value

COLLATERALIZED MORTGAGE OBLIGATIONS--continued¹

Whole Loan--continued

690,494

GE Capital Mortgage Services, Inc. 1994-27, Class A3, 6.50%, 7/25/2024

683,220

91,419

^{2, 3}

GE Capital Mortgage Services, Inc. 1994-3, Class B4, 6.50%, 1/25/2024

60,794

229,588

GE Capital Mortgage Services, Inc. 1996-3, Class A1, 7.00%, 3/25/2026

227,950

1,500,000

GE Capital Mortgage Services, Inc. 1998-3, Class A4, 6.25%, 1/25/2028

1,449,690

339,992

GE Capital Mortgage Services, Inc. 1998-11, Class 1A1, 6.75%, 6/25/2028

336,346

964,402

Headlands Mortgage Securities Inc. 1997-1, Class B3, 7.75%, 3/25/2027

939,124

519,000

Homeside Mortgage Securities, Inc. 1998-1, Class A2, 6.75%, 2/25/2028

486,944

900,000

^{2, 3}

Mellon Residential Funding Corp. 1998-TBC1, Class B4, 6.595%, 10/25/2028

670,500

1,258,000

Mellon Residential Funding Corp. 1999-TBC1, Class B4, 6.434%, 1/25/2029

921,091

517,448

Resecuritization Mortgage Trust 1998-A, Class B3, 7.849%, 10/26/2023

440,477

1,000,000

Residential Accredit Loans, Inc 1997-QS12, Class A6, 7.25%, 11/25/2027

970,937

218,337

Residential Asset Securitization Trust 1997-A2, Class A3, 9.00%, 4/25/2027

218,328

1,000,000

Residential Asset Securitization Trust 1997-A7, Class A5, 7.50%, 9/25/2027

997,980

359,251

Residential Asset Securitization Trust 1998-A12, Class A1, 6.75%, 11/25/2028

354,836

866,560

Residential Funding Mortgage Securities I 1994-S13, Class M1, 7.00%, 5/25/2024

837,521

184,489

SMFC Trust Asset-Backed Certificates, Series 1997-A, Class 4, 7.719%, 1/28/2025

154,798

888,454

Structured Asset Securities Corp. 1999-ALS2, Class A2, 6.75%, 7/25/2029

839,066

TOTAL

13,406,277

TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS
(IDENTIFIED COST $15,038,472)

14,592,498

CORPORATE BONDS--12.6%

Banking--1.2%

1,000,000

Wells Fargo Co., Note, 6.50%, 9/3/2002

982,640

Finance - Automotive--1.1%

945,000

Ford Motor Credit Co., 8.55%, 4/8/2002

968,682

Financial Intermediaries--2.2%

1,000,000

Donaldson, Lufkin and Jenrette Securities Corp., Sr. Note, 5.875%, 4/1/2002

966,640

250,000

Lehman Brothers Holdings, Inc., Bond, 6.20%, 1/15/2002

244,353

200,000

Lehman Brothers Holdings, Inc., Medium Term Note, 6.00%, 2/26/2001

197,684

500,000

Lehman Brothers Holdings, Inc., Medium Term Note, 6.375%, 3/15/2001

495,240

TOTAL

1,903,917

Food & Drug Retailers--0.6%

500,000

Great Atlantic & Pacific Tea Co., Inc., Sr. Note, 7.70%, 1/15/2004

480,440

Principal
Amount

Value

CORPORATE BONDS--continued

Forest Products--0.7%

400,000

Fort James Corp., Sr. Note, 6.234%, 3/15/2001

397,236

200,000

Quno Corp., Sr. Note, 9.125%, 5/15/2005

210,086

TOTAL

607,322

Insurance--0.5%

250,000

Conseco, Inc., Note, 6.40%, 2/10/2003

233,710

250,000

HSB Group, Inc., Company Guarantee, 6.95%, 7/15/2027

229,025

TOTAL

462,735

Retailers--1.2%

500,000

Dayton-Hudson Corp., Note, 5.95%, 6/15/2000

500,190

50,000

Shopko Stores, Inc., 8.50%, 3/15/2002

50,789

500,000

Wal-Mart Stores, Inc., Note, 5.85%, 6/1/2000

500,450

TOTAL

1,051,429

Supranational--1.8%

1,500,000

Corp Andina De Fomento, Bond, 7.375%, 7/21/2000

1,502,010

Technology Services--1.9%

1,500,000

Unisys Corp., Sr. Note, 11.75%, 10/15/2004

1,627,500

Telecommunications & Cellular--1.1%

1,000,000

AT&T Corp., Global Bond, 5.625%, 3/15/2004

945,370

Utilities--0.3%

250,000

^{2, 3}

Camuzzi Gas, Bond, 9.25%, 12/15/2001

250,625

TOTAL CORPORATE BONDS (IDENTIFIED COST $10,973,972)

10,782,670

U.S. GOVERNMENT AGENCIES--1.4%¹

500,000

Federal Home Loan Bank, Sr. Note, 5.80%, 9/2/2008

456,205

276,680

Government National Mortgage Association ARM 8902, 30 Year, 6.375%, 1/20/2022

279,211

147,427

Government National Mortgage Association, Pool 423843, 8.50%, 8/15/2026

151,297

267,884

Government National Mortgage Association, Pool 780360, 11.00%, 9/15/2015

292,497

TOTAL U.S. GOVERNMENT AGENCIES (IDENTIFIED COST $1,244,300)

1,179,210

FOREIGN GOVERNMENTS/AGENCIES--0.9%

Government Agency --0.7%

553,500

Brazil, Government of, IDU, 6.50%, 1/1/2001

551,424

Sovereign--0.2%

200,000

Korea Development Bank, Bond, 7.125%, 9/17/2001

197,770

TOTAL FOREIGN GOVERNMENT AGENCIES (IDENTIFIED COST $691,574)

749,194

Shares or
Principal
Amount

Value

PREFERRED STOCKS--0.3%

Steel--0.3%

10,000

USX Capital LLC, Preferred, Series A (identified cost $254,375)

231,875

U.S. TREASURY OBLIGATIONS--6.7%

1,122,000

4.75%, 2/15/2004

1,061,659

250,000

5.375%, 6/30/2003

242,515

500,000

5.625%, 5/15/2001

495,870

1,000,000

5.75%, 11/15/2000

996,860

1,500,000

5.875%, 11/15/2004

1,473,405

1,400,000

7.50%, 11/15/2001

1,421,112

TOTAL U.S. TREASURY OBLIGATIONS (IDENTIFIED COST $5,751,258)

5,691,421

MUTUAL FUND--3.4%

353,248

The High Yield Bond Portfolio (identified cost $317,333)

2,886,035

REPURCHASE AGREEMENT--9.5%⁴

8,135,000

ABN AMRO, Inc., 6.18%, dated 3/31/2000, due 4/3/2000 (at amortized cost)

8,135,000

TOTAL INVESTMENTS (IDENTIFIED COST $87,572,879)⁵

85,891,888

1 Because of monthly principal payments, the average lives of the asset-backed securities, collateralized mortgage obligations and certain government agency securities are less than the indicated periods.

2 Denotes a restricted security which is subject to restrictions on resale under federal securities laws. At March 31, 2000, these securities amounted to $6,004,895 which represents 7.0% of net assets. Included in these amounts, securities which have been deemed liquid amounted to $5,850,097 which represents 6.9% of net assets.

3 Denotes a restricted security that has been deemed liquid by criteria approved by the fund's Board of Directors.

4 The repurchase agreement is fully collateralized by U.S. government and/or agency obligations based on market prices at the date of the portfolio. The investment in the repurchase agreement is through participation in a joint account with other Federated funds.

5 The cost of investments for federal tax purposes amounts to $87,572,879. The net unrealized depreciation of investments on a federal tax basis amounts to $1,680,991 which is comprised of $118,119 appreciation and $1,799,110 depreciation at March 31, 2000.

Note: The categories of investments are shown as a percentage of net assets ($85,217,842) at March 31, 2000.

The following acronym is used throughout this portfolio:

ARM	--Adjustable Rate Mortgage

See Notes which are an integral part of the Financial Statements

Statement of Assets and Liabilities

MARCH 31, 2000 (UNAUDITED)

Assets:

Total investments in securities, at value (identified and tax cost $87,572,879)

85,891,888

Cash

3,378

Income receivable

856,086

Prepaid expenses

30,285

TOTAL ASSETS

86,781,637

Liabilities:

Payable for investments purchased

1,075,000

Income distribution payable

472,000

Accrued expenses

16,795

TOTAL LIABILITIES

1,563,795

Net assets for 8,708,860 shares outstanding

85,217,842

Net Assets Consist of:

Paid-in capital

87,434,224

Net unrealized depreciation of investments

(1,680,991

)

Accumulated net realized loss on investments

(540,375

)

Undistributed net investment income

4,984

TOTAL NET ASSETS

85,217,842

Net Asset Value, Offering Price and Redemption Proceeds Per Share

Institutional Shares:

$76,499,394 ÷ 7,817,887 shares outstanding

$9.79

Institutional Service Shares:

$8,718,448 ÷ 890,973 shares outstanding

$9.79

See Notes which are an integral part of the Financial Statements

Statement of Operations

SIX MONTHS ENDED MARCH 31, 2000 (UNAUDITED)

Investment Income:

Dividends

153,095

Interest

2,658,722

TOTAL INCOME

2,811,817

Expenses:

Investment adviser fee

154,913

Administrative personnel and services fee

65,033

Custodian fees

4,007

Transfer and dividend disbursing agent fees and expenses

21,824

Directors'/Trustees' fees

1,177

Auditing fees

5,196

Legal fees

984

Portfolio accounting fees

26,256

Distribution services fee--Institutional Service Shares

10,506

Shareholder services fee--Institutional Shares

86,315

Shareholder services fee--Institutional Service Shares

10,506

Share registration costs

13,809

Printing and postage

10,535

Insurance premiums

598

Taxes

2,880

Miscellaneous

1,665

TOTAL EXPENSES

416,204

Waivers and Reimbursements:

Waiver of investment adviser fee

(154,913

)

Waiver of distribution services fee--Institutional Service Shares

(8,405

)

Waiver of shareholder services fee--Institutional Shares

(86,315

)

Reimbursement of other operating expenses

(18,103

)

TOTAL WAIVERS AND REIMBURSEMENTS

(267,736

)

Net expenses

148,468

Net investment income

2,663,349

Realized and Unrealized Gain (Loss) on Investments:

Net realized gain on investments

33,348

Net change in unrealized depreciation of investments

(745,872

)

Net realized and unrealized loss on investments

(712,524

)

Change in net assets resulting from operations

1,950,825

See Notes which are an integral part of the Financial Statements

Statement of Changes in Net Assets

Six Months
Ended
(unaudited)
March 31,
2000

Year Ended
September 30,
1999

Increase (Decrease) in Net Assets

Operations:

Net investment income

2,663,349

3,573,627

Net realized gain (loss) on investments ($33,348 and $2,474, respectively, as computed for federal tax purposes)

33,348

(558,411

)

Net change in unrealized appreciation (depreciation) of investments

(745,872

)

(1,379,505

)

CHANGE IN NET ASSETS RESULTING FROM OPERATIONS

1,950,825

1,635,711

Distributions to Shareholders:

Distributions from net investment income

Institutional Shares

(2,410,782

)

(2,875,443

)

Institutional Service Shares

(280,658

)

(659,954

)

CHANGE IN NET ASSETS RESULTING FROM DISTRIBUTIONS TO SHAREHOLDERS

(2,691,440

)

(3,535,397

)

Share Transactions:

Proceeds from sale of shares

23,397,020

62,007,341

Net asset value of shares issued to shareholders in payment of distributions declared

455,404

674,646

Cost of shares redeemed

(13,462,465

)

(27,337,842

)

CHANGE IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS

10,389,959

35,344,145

Change in net assets

9,649,344

33,444,459

Net Assets:

Beginning of period

75,568,498

42,124,039

End of period (including undistributed net investment income of $4,984 and $33,075, respectively)

85,217,842

75,568,498

See Notes which are an integral part of the Financial Statements

Financial Highlights--Institutional Shares

(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)

Six Months
Ended
(unaudited)
March 31,

Year Ended September 30,

2000

1999

1998

1997

Net Asset Value, Beginning of Period

$ 9.88

$10.23

$10.13

$10.00

Income From Investment Operations:

Net investment income

0.34

0.63

0.70

0.66

Net realized and unrealized gain (loss) on investments

(0.09

)

(0.35

)

0.12

0.14

TOTAL FROM INVESTMENT OPERATIONS

0.25

0.28

0.82

0.80

Less Distributions:

Distributions from net investment income

(0.34

)

(0.63

)

(0.70

)

(0.65

)

Distributions from net realized gain on investments and foreign currency transactions

(0.02

)

(0.02

)

TOTAL DISTRIBUTIONS

(0.34

)

(0.63

)

(0.72

)

(0.67

)

Net Asset Value, End of Period

$ 9.79

$ 9.88

$10.23

$10.13

Total Return²

2.60

2.88

7.85

8.27

Ratios to Average Net Assets:

Expenses

0.35

%³

0.35

0.32

0.00

Net investment income

6.91

%³

6.45

6.31

6.47

Expense waiver/reimbursement⁴

0.70

%³

0.91

1.95

8.74

Supplemental Data:

Net assets, end of period (000 omitted)

$76,499

$66,820

$30,219

$7,589

Portfolio turnover

109

1 For the year ended September 30, 1999, the fund was audited by Deloitte & Touche LLP. Each of the previous years was audited by other auditors.

2 Based on net asset value, which does not reflect the sales charge or contingent deferred sales charge, if applicable.

3 Computed on an annualized basis.

4 This voluntary expense decrease is reflected in both the expense and the net investment income ratios shown above.

See Notes which are an integral part of the Financial Statements

Financial Highlights--Institutional Service Shares

(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)

Six Months
Ended
(unaudited)
March 31,

Year Ended September 30,

2000

1999

1998

1997

Net Asset Value, Beginning of Period

$ 9.88

$10.23

$10.13

$10.00

Income From Investment Operations:

Net investment income

0.33

0.60

0.67

0.63

Net realized and unrealized gain (loss) on investments

(0.09

)

(0.35

)

0.12

0.15

TOTAL FROM INVESTMENT OPERATIONS

0.24

0.25

0.79

0.78

Less Distributions:

Distributions from net investment income

(0.33

)

(0.60

)

(0.67

)

(0.63

)

Distributions from net realized gain on investments and foreign currency transactions

(0.02

)

(0.02

)

TOTAL DISTRIBUTIONS

(0.33

)

(0.60

)

(0.69

)

(0.65

)

Net Asset Value, End of Period

$ 9.79

$ 9.88

$10.23

$10.13

Total Return²

2.44

2.57

7.53

8.10

Ratios to Average Net Assets:

Expenses

0.65

%³

0.65

0.62

0.29

Net investment income

6.61

%³

6.09

6.03

6.31

Expense waiver/reimbursement⁴

0.65

%³

0.86

1.94

14.52

Supplemental Data:

Net assets, end of period (000 omitted)

$8,718

$8,749

$11,905

$2,724

Portfolio turnover

109

1 For the year ended September 30, 1999, the fund was audited by Deloitte & Touche LLP. Each of the previous years was audited by other auditors.

2 Based on net asset value, which does not reflect the sales charge or contingent deferred sales charge, if applicable.

3 Computerized on an annualized basis.

4 This voluntary expense decrease is reflected in both the expense and the net investment income ratios shown above.

See Notes which are an integral part of the Financial Statements

Notes to Financial Statements

MARCH 31, 2000 (UNAUDITED)

ORGANIZATION

Federated Total Return Series, Inc. (the "Corporation") is registered under the Investment Company Act of 1940, as amended (the "Act") as an open-end, management investment company. The Corporation consists of four portfolios. The financial statements included herein are only those of Federated Limited Duration Fund (the "Fund"), a diversified portfolio. The financial statements of the other portfolios are presented separately. The assets of each portfolio are segregated and a shareholder's interest is limited to the portfolio in which shares are held. The Fund offers two classes of shares: Institutional Shares and Institutional Service Shares. The investment objective of the Fund is to provide total return.

SIGNIFICANT ACCOUNTING POLICIES

The following is a summary of significant accounting policies consistently followed by the Fund in the preparation of its financial statements. These policies are in conformity with generally accepted accounting principles.

Investment Valuation

U.S. government securities, listed corporate bonds, other fixed income and asset-backed securities, unlisted securities and private placement securities are generally valued at the mean of the latest bid and asked price as furnished by an independent pricing service. Short-term securities are valued at the prices provided by an independent pricing service. However, short-term securities with remaining maturities of 60 days or less at the time of purchase may be valued at amortized cost, which approximates fair market value. Investments in other open-end regulated investment companies are valued at net asset value. With respect to valuation of foreign securities, trading in foreign cities may be completed at times which vary from the closing of the New York Stock Exchange. Therefore, foreign securities are valued at the latest closing price on the exchange on which they are traded prior to the closing of the New York Stock Exchange. Foreign securities quoted in foreign currencies are translated into U.S. Dollars at the foreign exchange rate in effect at noon, eastern time, on the day the value of the foreign security is determined.

Repurchase Agreements

It is the policy of the Fund to require the custodian bank to take possession, to have legally segregated in the Federal Reserve Book Entry System, or to have segregated within the custodian bank's vault, all securities held as collateral under repurchase agreement transactions. Additionally, procedures have been established by the Fund to monitor, on a daily basis, the market value of each repurchase agreement's collateral to ensure that the value of collateral at least equals the repurchase price to be paid under the repurchase agreement.

The Fund will only enter into repurchase agreements with banks and other recognized financial institutions, such as broker/dealers, which are deemed by the Fund's adviser to be creditworthy pursuant to the guidelines and/or standards reviewed or established by the Board of Directors (the "Directors"). Risks may arise from the potential inability of counterparties to honor the terms of the repurchase agreement. Accordingly, the Fund could receive less than the repurchase price on the sale of collateral securities. The Fund, along with other affiliated investment companies, may utilize a joint trading account for the purpose of entering into one or more repurchase agreements.

Investment Income, Expenses and Distributions

Interest income and expenses are accrued daily. Bond premium and discount, if applicable, are amortized as required by the Internal Revenue Code, as amended (the "Code"). Dividend income and distributions to shareholders are recorded on the ex-dividend date. The Fund offers multiple classes of shares which differ in their respective distribution and service fees. All shareholders bear the common expenses of the Fund based on average daily net assets of each class, without distinction between share classes. Dividends are declared separately for each class. No class has preferential dividend rights; differences in per share dividend rates are generally due to differences in separate class expenses.

Federal Taxes

It is the Fund's policy to comply with the provisions of the Code applicable to regulated investment companies and to distribute to shareholders each year substantially all of its income. Accordingly, no provision for federal tax is necessary. Withholding taxes on foreign interest and dividends have been provided for in accordance with the applicable country's tax rules and rates.

At September 30 1999, the Fund, for federal tax purposes, had a capital loss carryforward of $3,491, which will reduce the Fund's taxable income arising from future net realized gain on investments, if any, to the extent permitted by the Code, and thus will reduce the amount of the distributions to shareholders which would otherwise be necessary to relieve the Fund of any liability for federal tax. Pursuant to the Code, such capital loss carryforward will expire in 2006.

Additionally, net capital losses of $569,868 attributable to security transactions incurred after October 31, 1998 are treated as arising on October 1, 1999, the first day of the Fund's next taxable year.

When-Issued and Delayed Delivery Transactions

The Fund may engage in when-issued or delayed delivery transactions. The Fund records when-issued securities on the trade date and maintains security positions such that sufficient liquid assets will be available to make payment for the securities purchased. Securities purchased on a when-issued or delayed delivery basis are marked to market daily and begin earning interest on the settlement date. Losses may occur on these transactions due to changes in market conditions or the failure of counterparties to perform under the contract.

Restricted Securities

Restricted securities are securities that may only be resold upon registration under federal securities laws or in transactions exempt from such registration. In some cases, the issuer of restricted securities has agreed to register such securities for resale, at the issuer's expense either upon demand by the Fund or in connection with another registered offering of the securities. Many restricted securities may be resold in the secondary market in transactions exempt from registration. Such restricted securities may be determined to be liquid under criteria established by the Directors. The Fund will not incur any registration costs upon such resales. The Fund's restricted securities are valued at the price provided by dealers in the secondary market or, if no market prices are available, at the fair value as determined by the Fund's pricing committee.

Additional information on each restricted security held at March 31, 2000 is as follows:

Security

Acquisition
Date

Acquisition
Cost

SMFC Trust Asset-Backed Certificates

2/4/1998

$168,566

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts of assets, liabilities, expenses and revenues reported in the financial statements. Actual results could differ from those estimated.

Other

Investment transactions are accounted for on a trade date basis.

CAPITAL STOCK

At March 31, 2000, par value shares ($0.001 per share) authorized were as follows:

Share Class Name		Number of Par Value Capital Stock Authorized
Institutional Shares		1,000,000,000
Institutional Service Shares		1,000,000,000
TOTAL		2,000,000,000

Transactions in capital stock were as follows:

Six Months Ended
March 31, 2000

Year Ended
September 30, 1999

Institutional Shares:

Shares

Amount

Shares

Amount

Shares sold

2,205,084

21,595,947

5,262,382

52,646,943

Shares issued to shareholders in payment of distributions declared

35,309

345,842

40,839

408,205

Shares redeemed

(1,185,784

)

(11,601,440

)

(1,494,996

)

(14,918,969

)

NET CHANGE RESULTING FROM INSTITUTIONAL SHARE TRANSACTIONS

1,054,609

10,340,349

3,808,225

38,136,179

Six Months Ended
March 31, 2000

Year Ended
September 30, 1999

Institutional Service Shares:

Shares

Amount

Shares

Amount

Shares sold

183,934

1,801,073

933,821

9,360,398

Shares issued to shareholders in payment of distributions declared

11,191

109,562

26,571

266,441

Shares redeemed

(189,740

)

(1,861,025

)

(1,238,993

)

(12,418,873

)

NET CHANGE RESULTING FROM INSTITUTIONAL SERVICE SHARE TRANSACTIONS

5,385

49,610

(278,601

)

(2,792,034

)

NET CHANGE RESULTING FROM SHARE TRANSACTIONS

1,059,994

10,389,959

3,529,624

35,344,145

INVESTMENT ADVISER FEE AND OTHER TRANSACTIONS WITH AFFILIATES

Investment Adviser Fee

Federated Investment Management Company, the Fund's investment adviser (the "Adviser"), receives for its services an annual investment Adviser fee equal to 0.40% of the Fund's average daily net assets. The Adviser may voluntarily choose to waive any portion of its fee and/or reimburse certain operating expenses of the Fund. The Adviser can modify or terminate this voluntary waiver and/or reimbursement at any time at its sole discretion.

Administrative Fee

Federated Services Company ("FServ"), under the Administrative Services Agreement, provides the Funds with administrative personnel and services. The fee paid to FServ is based on a scale that ranges from 0.15% to 0.075% of the average aggregate daily net assets of all funds advised by subsidiaries of Federated Investors, Inc., subject to a $125,000 minimum per portfolio and $30,000 per each additional class.

Distribution Services Fee

The Fund has adopted a Distribution Plan (the "Plan") pursuant to Rule 12b-1 under the Act. Under the terms of the Plan, the Fund will compensate Federated Securities Corp. ("FSC"), the principal distributor, from the net assets of the Institutional Service Shares to finance activities intended to result in the sale of the Fund's Institutional Service Shares. The Plan provides that the Fund may incur distribution expenses up to 0.25% of the average daily net assets of the Institutional Service Shares, annually, to compensate FSC. The distributor may voluntarily choose to waive any portion of its fee. The distributor can modify or terminate this voluntary waiver at any time at its sole discretion.

Shareholder Services Fee

Under the terms of a Shareholder Services Agreement with Federated Shareholder Services Company ("FSSC"), the Fund will pay FSSC up to 0.25% of average daily net assets of the Fund for the period. The fee paid to FSSC is used to finance certain services for shareholders and to maintain shareholder accounts. FSSC may voluntarily choose to waive any portion of its fee. FSSC can modify or terminate this voluntary waiver at any time at its sole discretion.

Transfer and Dividend Disbursing Agent Fees and Expenses

FServ, through its subsidiary FSSC, serves as transfer and dividend disbursing agent for the Fund. The fee paid to FSSC is based on the size, type, and number of accounts and transactions made by shareholders.

Portfolio Accounting Fees

FServ maintains the Fund's accounting records for which it receives a fee. The fee is based on the level of the Fund's average daily net assets for the period, plus out-of-pocket expenses.

General

Certain of the Officers and Directors of the Corporation are Officers and Directors or Trustees of the above companies.

Investment Transactions

Purchases and sales of investments, excluding short-term securities (and in-kind contributions), for the period ended March 31, 2000, were as follows:

Purchases	$	14,179,465

Sales	$	8,659,588

Directors

JOHN F. DONAHUE

THOMAS G. BIGLEY

JOHN T. CONROY, JR.

NICHOLAS P. CONSTANTAKIS

JOHN F. CUNNINGHAM

J. CHRISTOPHER DONAHUE

LAWRENCE D. ELLIS, M.D.

PETER E. MADDEN

CHARLES F. MANSFIELD, JR.

JOHN E. MURRAY, JR., J.D., S.J.D.

MARJORIE P. SMUTS

JOHN S. WALSH

Officers

JOHN F. DONAHUE

Chairman

GLEN R. JOHNSON

President

WILLIAM D. DAWSON III

Chief Investment Officer

J. CHRISTOPHER DONAHUE

Executive Vice President

EDWARD C. GONZALES

Executive Vice President

JOHN W. MCGONIGLE

Executive Vice President and Secretary

RICHARD J. THOMAS

Treasurer

C. GRANT ANDERSON

Assistant Secretary

Mutual funds are not bank deposits or obligations, are not guaranteed by any bank, and are not insured or guaranteed by the U.S. government, the Federal Deposit Insurance Corporation, the Federal Reserve Board, or any other government agency. Investment in mutual funds involves investment risk, including the possible loss of principal.

This report is authorized for distribution to prospective investors only when preceded or accompanied by the fund's prospectus which contains facts concerning its objective and policies, management fees, expenses and other information.

Federated
World-Class Investment Manager

SEMI-ANNUAL REPORT

Federated Limited Duration Fund

SEMI-ANNUAL REPORT
TO SHAREHOLDERS

MARCH 31, 2000

Federated
Federated Limited Duration Fund
Federated Investors Funds
5800 Corporate Drive
Pittsburgh, PA 15237-7000
1-800-341-7400
www.federatedinvestors.com
Federated Securities Corp., Distributor

Cusip 31428Q408
Cusip 31428Q309

G01998-06 (5/00)

Federated is a registered mark of Federated Investors, Inc. 2000 ©Federated Investors, Inc.

SEMI-ANNUAL REPORT

President's Message

Dear Investor:

I am pleased to present the Semi-Annual Report to shareholders for Federated Mortgage Fund, a portfolio of Federated Total Return Series, Inc. The report covers the six-month period from October 1, 1999 through March 31, 2000 and includes commentary by the fund's portfolio manager, followed by the portfolio of investments and financial statements.

During the reporting period, the fund's diversified portfolio of mortgage backed securities produced a total return of 2.46%¹ for Institutional Shares and 2.31%¹ for Institutional Service Shares. Dividends paid by the fund during this reporting period totaled $0.33 per share for Institutional Shares and $0.31 per share for Institutional Service Shares. Both share classes also paid a capital gain of $0.01 per share. The fund's total net assets reached $17.2 million on the last day of the reporting period.

Thank you for pursuing total return through this fund's diversified, professionally managed portfolio of mortgage securities. As always, we welcome your questions and comments.

Sincerely,

Glen R. Johnson

Glen R. Johnson
President
May 15, 2000

1 Past performance is no guarantee of future results. Investment return and principal value will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost.

Investment Review

Federated Mortgage Fund provides shareholders with a professionally managed portfolio of mortgage backed securities. The fund will invest at least 65% of its total assets in U.S. Government and non-U.S. Government mortgage backed securities.

During the semi-annual reporting period, the U.S. Treasury market saw yields in the 2- to 5-year area increase on average by 70 basis points. Yields on 10-year Treasuries rose by 14 basis points while the yield on the 30-year U.S. Treasury declined by 22 basis points. This movement in yields caused the yield curve to invert. The yield curve inversion has occurred as the Federal Reserve Board (the "Fed") increased the federal funds target rate and the Treasury announced its intention to retire up to $30 billion in outstanding Treasury debt by the end of the year. This announcement caused the demand for Treasury notes and bonds to surge because they were the prime targets of the buyback program. The current buyback program is an outgrowth of a growing budget surplus that the Congressional Budget Office expects to reach $1.9 trillion in 2010. New Treasuries will still be issued at the same time, but in smaller numbers. The continuation of the yield curve inversion depends on supply factors and on inflation expectations. The Fed has made it clear that it intends to slow the economy to a level that is compatible with non-inflationary growth. Moreover, it appears that central banks globally are joining the same march to stay ahead of the inflation curve by preemptively tightening.

Investors in the mortgage market also had a tumultuous experience. The first half of the reporting period saw mortgage backed securities outperform equivalent duration adjusted Treasuries. A favorable environment was created as rising interest rates put a damper on supply. However, this environment proved to be short lived as the second half of the reporting period saw spread assets of all types widen to crisis levels. The widening in spreads occurred when a U.S. Treasury proposal was announced to make several changes to the relationship between the U.S. Government and the housing Government Sponsored Entities (GSEs). The mortgage market is currently dominated by two GSEs, Federal Home Loan Mortgage Corporation (FHLMC) and Federal National Mortgage Association (FNMA). They were originally established under a U.S. Government charter to increase the availability of mortgage credit for residential housing. Their primary mission is to develop and maintain an active market in conventional residential mortgages. They accomplish this by purchasing residential mortgages from individual financial institutional lenders and grouping them into pools for sale into the marketplace.

The changes suggested by the U.S. Treasury involve repealing the GSEs discretionary lines of credit with the U.S. Government and requiring the agencies to be reviewed annually by one of the major rating agencies. The credit lines are now purely symbolic. They were established in 1957 when the GSEs were merely a fraction of their current size. The severing of these ties would have little practical importance if a true crisis developed. GSEs are not rated in the same manner as other corporate bonds although they received a AAA rating assessment from Moody's. Any material change in the linkage between the government and the GSEs would cause the rating agencies to reassess their ratings, as is their usual practice. The initial reaction of the fixed income markets to the Treasury's proposal drove spreads wider as investors tried to ascertain what this meant for the agencies and their issuance of securities.

Attempts in the early 1990s to limit the U.S. Government implicit guarantee to the GSEs failed. In addition, since it is believed that the GSEs help decrease the cost of housing across the nation, it is difficult for Congress to argue for any bill that will increase the housing costs to a large number of their constituents. While political rumblings are likely to continue into the summer when Congressional hearings regarding the GSEs status are to be held, agency mortgages continue to trade at historically wide levels. Prepayment risk continues to be very low and declining net issuance should help mortgage spreads to tighten.

Current portfolio strategy targets an effective duration of 4.35 years, which is neutral to the Lehman Brothers Mortgage Backed Securities Index.¹ Throughout the reporting period, the fund selectively added to agency and non-agency structured mortgage product. The combination of attractive option adjusted spread and better convexity highlights better long-term value compared to typical agency pass-throughs. As of March 31, 2000, the fund recorded net assets of $17.2 million with an average 30-day net yield as calculated under SEC guidelines of 6.99%² for Institutional Shares and 6.69%² for Institutional Service Shares based upon a net asset value of $9.67. The fund's total return for the semi-annual reporting period ended March 31, 2000, was 2.46% for the Institutional Shares and 2.31% for the Institutional Service Shares.² This compares to 1.77% for the Lehman Brothers Mortgage Backed Securities Index.

1 The Lehman Brothers Mortgage Backed Securities Index is an unmanaged index composed of all fixed income securities issued by GNMA, FNMA and FHLMC, including GNMA graduated payment mortgages. Investments cannot be made in an index.

Portfolio of Investments

MARCH 31, 2000 (UNAUDITED)

Principal
Amount

Value

ASSET-BACKED SECURITIES--5.6%

Home Equity Loans--5.6%

15,491

Green Tree Home Equity Loan Trust 99, Class B2A, 7.440%, 2/15/2029

15,513

200,000

Mellon Bank Home Equity Installment Loan 98-1, 6.950%, 3/25/2015

186,794

12,498,115

New Century Home Equity Loan Trust 99, Class C3, (Interest Only), 1.935%, 6/25/2002

474,528

5,227,737

Salomon Brothers Mortgage Sec. VII-4, (Interest Only), 2.547%, 04/15/2028

280,991

TOTAL ASSET-BACKED SECURITIES (IDENTIFIED COST $993,666)

957,826

LONG-TERM OBLIGATIONS--96.0%

Federal Home Loan Mortgage Corporation18.6%

1,772,693

6.500%, 9/1/2028

1,665,782

536,422

7.000%, 6/1/2028

516,639

1,032,147

7.500%, 2/1/2027

1,016,985

TOTAL

3,199,406

Federal Home Loan Mortgage Corporation-Debenture--5.3%

1,000,000

5.750%, 3/15/2009

905,460

Federal Home Loan Mortgage Corporation REMIC--7.9%

1,175,820

Series 197, (Principal Only), 4/1/2028

701,817

2,555,701

Series 2139, (Interest Only), 6.500%, 10/15/2026

654,098

TOTAL

1,355,915

Federal National Mortgage Association--30.6%

1,969,521

6.000%, 6/1/2014 - 7/1/2029

1,803,603

1,146,008

6.500%, 10/1/2029

1,074,382

1,935,708

7.000%, 4/1/2029 -- 7/1/2029

1,862,339

100,000

7.500%, 2/1/2030

98,281

423,389

8.000%, 12/1/2026

424,845

TOTAL

5,263,450

Principal
Amount

Value

LONG-TERM OBLIGATIONS--continued

Federal National Mortgage Association REMIC--3.7%

426,625

FNGT, Series 99-T2-A1, 7.500%, 1/19/2039

423,425

327,090

Series 284-1, (Principal Only), 7/1/2027

222,931

TOTAL

646,356

Government National Mortgage Association--24.7%

1,791,316

6.500%, 5/15/2024 - 4/15/2029

1,700,895

2,166,520

7.000%, 9/15/2028 - 6/15/2029

2,100,182

463,954

7.500%, 7/15/2029

460,039

TOTAL

4,261,116

Mutual Fund--5.2%

92,000

Income Opportunities Fund 2000, Inc.

897,000

TOTAL LONG-TERM OBLIGATIONS (IDENTIFIED COST $16,929,187)

16,528,703

REPURCHASE AGREEMENT--0.9%²

150,000

ABN AMRO, Inc., 6.180%, dated 3/31/2000, due 4/3/2000 (at amortized cost)

150,000

TOTAL INVESTMENTS (IDENTIFIED COST $18,072,853)³

$17,636,529

1 Indicates securities subject to dollar roll transactions.

2 The repurchase agreement is fully collateralized by U.S. government and/or agency obligations based on market prices at the date of the portfolio. The investment in the repurchase agreement is through participation in joint accounts with other Federated funds.

3 The cost of investments for federal tax purposes amounts to $18,072,853. The net unrealized depreciation of investments on a federal tax basis amounts to $436,324 which is comprised of $161,203 appreciation and $597,527 depreciation at March 31, 2000.

Note: The categories of investments are shown as a percentage of net assets ($17,209,308) at March 31, 2000.

The following acronym is used throughout this portfolio:

REMIC

--Real Estate Mortgage Investment Conduit

See Notes which are an integral part of the Financial Statements

Statement of Assets and Liabilities

MARCH 31, 2000 (UNAUDITED)

Assets:

Total investments in securities, at value (identified and tax cost $18,072,853)

17,636,529

Cash

1,471

Income receivable

83,253

Receivable for investments sold

26,562

Prepaid expenses

49,494

TOTAL ASSETS

17,797,309

Liabilities:

Income distribution payable

98,166

Payable for dollar roll transactions

479,396

Accrued expenses

10,439

TOTAL LIABILITIES

588,001

Net assets for 1,779,754 shares outstanding

17,209,308

Net Assets Consist of:

Paid in capital

17,660,752

Net unrealized depreciation of investments

(436,324

)

Accumulated net realized loss on investments

(33,330

)

Undistributed net investment income

18,210

TOTAL NET ASSETS

17,209,308

Net Asset Value, Offering Price and Redemption Proceeds Per Share

Institutional Shares:

$16,640,186 ÷ 1,720,897 shares outstanding

$9.67

Institutional Service Shares:

$569,122 ÷ 58,857 shares outstanding

$9.67

See Notes which are an integral part of the Financial Statements

Statement of Operations

SIX MONTHS ENDED MARCH 31, 2000 (UNAUDITED)

Investment Income:

Dividends

16,576

Interest (net of dollar roll expense of $18,302)

621,704

TOTAL INCOME

638,280

Expenses:

Investment adviser fee

35,056

Administrative personnel and services fee

66,884

Custodian fees

2,081

Transfer and dividend disbursing agent fees and expenses

19,980

Directors'/Trustees' fees

1,217

Auditing fees

4,754

Legal fees

797

Portfolio accounting fees

23,255

Distribution services fee--Institutional Service Shares

765

Shareholder services fee--Institutional Shares

21,145

Shareholder services fee--Institutional Service Shares

765

Share registration costs

10,608

Printing and postage

8,323

Insurance premiums

556

Taxes

657

Miscellaneous

736

TOTAL EXPENSES

197,579

Waivers and Reimbursements:

Waiver of investment adviser fee

(35,056

)

Waiver of distribution services fee--Institutional Service Shares

(612

)

Waiver of shareholder services fee--Institutional Shares

(21,145

)

Reimbursement of other operating expenses

(113,555

)

TOTAL WAIVERS AND REIMBURSEMENTS

(170,368

)

Net expenses

27,211

Net investment income

611,069

Realized and Unrealized Gain (Loss) on Investments:

Net realized gain on investments

5,066

Net change in unrealized depreciation of investments

(196,826

)

Net realized and unrealized loss on investments

(191,760

)

Change in net assets resulting from operations

419,309

See Notes which are an integral part of the Financial Statements

Statement of Changes in Net Assets

Six Months
Ended
(unaudited)
March 31,
2000

Year
Ended
September 30,
1999

Increase (Decrease) in Net Assets

Operations:

Net investment income

611,069

685,841

Net realized gain (loss) on investments ($5,066 and $440, respectively, as computed for federal tax purposes)

5,066

(9,453

)

Net change in unrealized appreciation (depreciation) of investments

(196,826

)

(394,001

)

CHANGE IN NET ASSETS RESULTING FROM OPERATIONS

419,309

282,387

Distributions to Shareholders:

Distributions from net investment income

Institutional Shares

(573,042

)

(669,956

)

Institutional Service Shares

(19,817

)

(10,121

)

Distributions from net realized gains on investments

Institutional Shares

(14,674

)

Institutional Service Shares

(557

)

CHANGE IN NET ASSETS RESULTING FROM DISTRIBUTIONS TO SHAREHOLDERS

(608,090

)

(680,077

)

Share Transactions:

Proceeds from sale of shares

2,549,776

11,435,668

Proceeds from shares issued in connection with the tax-free transfer of assets from Common Trust Fund

3,204,570

Net asset value of shares issued to shareholders in payment of distributions declared

56,715

96,174

Cost of shares redeemed

(2,786,480

)

(1,999,893

)

CHANGE IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS

(179,989

)

12,736,519

Change in net assets

(368,770

)

12,338,829

Net Assets:

Beginning of period

17,578,078

5,239,249

End of period

17,209,308

17,578,078

See Notes which are an integral part of the Financial Statements

Financial Highlights--Institutional Shares

(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)

Six Months
Ended
(unaudited)
March 31,

Year Ended September 30,

2000

1999

1998

1997

Net Asset Value, Beginning of Period

$ 9.77

$10.11

$10.26

$10.00

Income From Investment Operations:

Net investment income

0.34

0.67

0.95

0.25

Net realized and unrealized gain (loss) on investments

(0.10

)

(0.35

)

(0.15

)

0.26

TOTAL FROM INVESTMENT OPERATIONS

0.24

0.32

0.80

0.51

Less Distributions:

Distributions from net investment income

(0.33

)

(0.66

)

(0.95

)

(0.25

)

Distributions from net realized gain on investments

(0.01

)

TOTAL DISTRIBUTIONS

(0.34

)

(0.66

)

(0.95

)

(0.25

)

Net Asset Value, End of Period

$ 9.67

$ 9.77

$10.11

$10.26

Total Return³

2.46

3.20

8.25

5.12

Ratios to Average Net Assets:

Expenses

0.30

%⁴

0.30

0.26

0.00

%⁴

Net investment income

6.98

%⁴

6.63

9.42

7.37

%⁴

Expense waiver/reimbursement⁵

1.95

%⁴

3.65

7.22

12.25

%⁴

Supplemental Data:

Net assets, end of period (000 omitted)

$16,640

$17,049

$5,224

$5,145

Portfolio turnover

150

147

1 For the year ended September 30, 1999, the fund was audited by Deloitte & Touche LLP. Each of the previous years was audited by other auditors.

2 Reflects operations for the period May 31, 1997 (start of performance) to September 30, 1997.

3 Based on net asset value, which does not reflect the sales charge or contingent deferred sales charge, if applicable.

4 Computed on an annualized basis.

5 This voluntary expense decrease is reflected in both the expense and the net investment income ratios shown above.

See Notes which are an integral part of the Financial Statements

Financial Highlights--Institutional Service Shares

(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)

Six Months
Ended
(unaudited)
March 31,

Year Ended September 30,

2000

1999

1998

1997

Net Asset Value, Beginning of Period

$ 9.77

$10.11

$10.26

$10.00

Income From Investment Operations:

Net investment income

0.32

0.66

0.92

0.24

Net realized and unrealized gain (loss) on Investments

(0.10

)

(0.37

)

(0.15

)

0.26

TOTAL FROM INVESTMENT OPERATIONS

0.22

0.29

0.77

0.50

Less Distributions:

Distributions from net investment income

(0.31

)

(0.63

)

(0.92

)

(0.24

)

Distributions from net realized gain on investments

(0.01

)

TOTAL DISTRIBUTIONS

(0.32

)

(0.63

)

(0.92

)

(0.24

)

Net Asset Value, End of Period

$ 9.67

$ 9.77

$10.11

$10.26

Total Return³

2.31

2.89

7.93

5.07

Ratios to Average Net Assets:

Expenses

0.60

%⁴

0.60

0.48

0.00

%⁴

Net investment income

6.69

%⁴

6.38

6.62

7.76

%⁴

Expense waiver/reimbursement⁵

1.90

%⁴

3.60

8.52

14.14

%⁴

Supplemental Data:

Net assets, end of period (000 omitted)

$569

$529

$15

Portfolio turnover

150

147

1 For the year ended September 30, 1999, the fund was audited by Deloittle & Touche LLP. Each of the previous years was audited by other auditors.

2 Reflects operations for the period from May 31, 1997 (start of performance) to September 30, 1997.

3 Based on net asset value, which does not reflect the sales charge or contingent deferred sales charge, if applicable.

4 Computed on an annualized basis.

5 This voluntary expense decrease is reflected in both the expense and the net investment income ratios shown above.

See Notes which are an integral part of the Financial Statements

Notes to Financial Statements

MARCH 31, 2000 (UNAUDITED)

ORGANIZATION

Federated Total Return Series, Inc. (the "Corporation") is registered under the Investment Company Act of 1940, as amended (the "Act") as an open-end, management investment company. The Corporation consists of four portfolios. The financial statements included herein are only those of Federated Mortgage Fund (the "Fund"), a diversified portfolio. The financial statements of the other portfolios are presented separately. The assets of each portfolio are segregated and a shareholder's interest is limited to the portfolio in which shares are held. The Fund offers two classes of shares: Institutional Shares and Institutional Service Shares. The investment objective of the Fund is to provide total return.

On July 19, 1999, the Fund received a tax-free transfer of assets from a Common Trust Fund as follows:

Fund Shares Issued

325,337

Common Trust Fund Net Assets Received

3,204,570

Unrealized Appreciation¹

84,429

1 Unrealized appreciation is included in the Common Trust Fund net assets acquired above.

Significant Accounting Policies

Investment Valuations

U.S. government securities are generally valued at the mean of the latest bid and asked price as furnished by an independent pricing service. Short-term securities are valued at the prices provided by an independent pricing service. However, short-term securities with remaining maturities of 60 days or less at the time of purchase may be valued at amortized cost, which approximates fair market value.

Repurchase Agreements

Investment Income, Expenses and Distributions

Interest income and expenses are accrued daily. Bond premium and discount, if applicable, are amortized as required by the Internal Revenue Code, as amended (the "Code"). Dividend income and distributions to shareholders are recorded on the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at fair value. The Fund offers multiple classes of shares, which differ in their respective distribution and service fees. All shareholders bear the common expenses of the Fund based on average daily net assets of each class, without distinction between share classes. Dividends are declared separately for each class. No class has preferential dividend rights; differences in per share dividend rates are generally due to differences in separate class expenses.

Federal Taxes

At September 30, 1999, the Fund, for federal tax purposes, had a capital loss carryforward of $13,272, which will reduce the Fund's taxable income arising from future net realized gain on investments, if any, to the extent permitted by the Code, and thus will reduce the amount of the distributions to shareholders which would otherwise be necessary to relieve the Fund of any liability for federal tax. Pursuant to the Code, such capital loss carryforward will expire in 2006.

Additionally, net capital losses of $9,484 attributable to security transactions incurred after October 31, 1998 are treated as arising on October 1, 1999, the first day of the Fund's next taxable year.

When-Issued and Delayed Delivery Transactions

Dollar Roll Transactions

The Fund enters into dollar roll transactions, with respect to mortgage securities issued by GNMA, FNMA and FHLMC, in which the Fund sells mortgage securities to financial institutions and simultaneously agrees to accept substantially similar (same type, coupon and maturity) securities at a later date at an agreed upon price. Dollar roll transactions involve "to be announced" securities and are treated as short-term financing arrangements which will not exceed 12 months. The Fund will use the proceeds generated from the transactions to invest in short-term investments, which may enhance the Fund's current yield and total return.

Use of Estimates

Other

Investment transactions are accounted for on a trade date basis.

Capital Stock

At March 31, 2000, par value shares ($0.001 per share) authorized were as follows:

Share Class Name		Number of Par Value Capital Stock Authorized
Institutional Shares		1,000,000

Institutional Service Shares		1,000,000

TOTAL		2,000,000

Transactions in capital stock were as follows:

Six Months Ended
March 31, 2000

Year Ended
September 30, 1999

Institutional Shares:

Shares

Amount

Shares

Amount

Shares sold

239,495

2,316,447

1,087,338

10,771,969

Shares issued in connection with the tax-free transfer of assets from a Common Trust Fund

325,337

3,204,570

Shares issued to shareholders in payment of distributions declared

4,491

43,533

8,852

87,946

Shares redeemed

(268,109

)

(2,586,800

)

(193,428

)

(1,929,683

)

NET CHANGE RESULTING FROM INSTITUTIONAL SHARE TRANSACTIONS

(24,123

)

(226,820

)

1,228,099

12,134,802

Six Months Ended
March 31, 2000

Year Ended
September 30, 1999

Institutional Service Shares:

Shares

Amount

Shares

Amount

Shares sold

24,126

233,329

58,881

579,270

Shares issued to shareholders in payment of distributions declared

1,362

13,182

841

8,228

Shares redeemed

(20,741)

(199,680

)

(7,138

)

(70,210

)

NET CHANGE RESULTING FROM INSTITUTIONAL SERVICE SHARE TRANSACTIONS

4,747

46,831

52,584

517,288

NET CHANGE RESULTING FROM SHARE TRANSACTIONS

(19,376)

(179,989

)

1,280,683

12,652,090

INVESTMENT ADVISER FEE AND OTHER TRANSACTIONS WITH AFFILIATES

Investment Adviser Fee

Federated Investment Management Company, the Fund's investment adviser (the "Adviser"), receives for its services an annual investment adviser fee equal to 0.40% of the Fund's average daily net assets. The Adviser may voluntarily choose to waive any portion of its fee and/or reimburse certain operating expenses of the Fund. The Adviser can modify or terminate this voluntary waiver and/or reimbursement at any time at its sole discretion.

Administrative Fee

Distribution Services Fee

The Fund has adopted a Distribution Plan (the "Plan") pursuant to Rule 12b-1 under the Act. Under the terms of the Plan, the Fund will compensate Federated Securities Corp. ("FSC"), the principal distributor, from the net assets of the Fund to finance activities intended to result in the sale of the Fund's Institutional Service Shares. The Plan provides that the Fund may incur distribution expenses up to 0.25% of the average daily net assets of the Institutional Service Shares, annually, to compensate FSC. FSC may voluntarily choose to waive any portion of its fee. FSC can modify or terminate this voluntary waiver at any time at its sole discretion.

Shareholder Services Fee

Transfer and Dividend Disbursing Agent Fees and Expenses

Portfolio Accounting Fees

FServ maintains the Fund's accounting records for which it receives a fee. The fee is based on the level of the Fund's average daily net assets for the period, plus out-of-pocket expenses.

Interfund Transactions

During the period ended March 31, 2000, the Fund engaged in purchase and sale transactions with funds that have a common investment adviser (or affiliated investment advisers), common Directors/Trustees, and/or common Officers. These purchase and sale transactions complied with Rule 17a-7 under the Act and amounted to $2,388,735 and $1,353,206, respectively.

General

Certain of the Officers and Directors of the Corporation are Officers and Directors or Trustees of the above companies.

Investment Transactions

Purchases and sales of investments, excluding short-term securities (and in-kind contributions), for the period ended March 31, 2000, were as follows:

Purchases	$	6,520,479

Sales	$	6,046,353

Directors

JOHN F. DONAHUE

THOMAS G. BIGLEY

JOHN T. CONROY, JR.

NICHOLAS P. CONSTANTAKIS

JOHN F. CUNNINGHAM

J. CHRISTOPHER DONAHUE

LAWRENCE D. ELLIS, M.D.

PETER E. MADDEN

CHARLES F. MANSFIELD, JR.

JOHN E. MURRAY, JR., J.D., S.J.D.

MARJORIE P. SMUTS

JOHN S. WALSH

Officers

JOHN F. DONAHUE

Chairman

GLEN R. JOHNSON

President

WILLIAM D. DAWSON III

Chief Investment Officer

J. CHRISTOPHER DONAHUE

Executive Vice President

EDWARD C. GONZALES

Executive Vice President

JOHN W. MCGONIGLE

Executive Vice President and Secretary

RICHARD J. THOMAS

Treasurer

C. GRANT ANDERSON

Assistant Secretary

Federated
World-Class Investment Manager

SEMI-ANNUAL REPORT

Federated Mortgage Fund

SEMI-ANNUAL REPORT TO SHAREHOLDERS

MARCH 31, 2000

Federated
Federated Mortgage Fund
Federated Investors Funds
5800 Corporate Drive
Pittsburgh, PA 15237-7000
1-800-341-7400
www.federatedinvestors.com
Federated Securities Corp., Distributor

Cusip 31428Q887
Cusip 31428Q804

G02367-01 (5/00)

Federated is a registered mark of Federated Investors, Inc. 2000 ©Federated Investors, Inc.

SEMI-ANNUAL REPORT

President's Message

Dear Investor:

I am pleased to present the Semi-Annual Report to shareholders for Federated Total Return Bond Fund, a portfolio of Federated Total Return Series, Inc. The report covers the six-month period from October 1, 1999 through March 31, 2000 and includes commentary by the fund's portfolio manager, followed by the portfolio of investments and financial statements.

During the reporting period, the fund's diversified portfolio of high-quality, investment grade bonds produced a total return of 2.38%¹ for Institutional Shares and 2.23%¹ for Institutional Service Shares. Dividends and capital gains paid by the fund during this reporting period totaled $0.34 per share and $0.01 per share, respectively, for Institutional Shares and $0.32 per share and $0.01 per share, respectively, for Institutional Service Shares. Net asset value for both share classes declined by $0.11 to end the reporting period at $10.07. The fund's net assets totaled $223 million on the last day of the reporting period.

We appreciate your participation in the total return opportunities of Federated Total Return Bond Fund. As always, we welcome your questions and comments.

Sincerely,

Glen R. Johnson

Glen R. Johnson
President
May 15, 2000

Investment Review

The fixed income markets experienced significant volatility over the six-month reporting period ended March 31, 2000. The initial three month period (fourth quarter of 1999) was largely negative for most high quality bond investments, in that interest rates rose across the entire maturity spectrum. The domestic economy accelerated as 1999 drew to a close, with much of new investor activity focused on the equity markets. In a strengthening economic environment, treasury yields increased most dramatically for shorter maturities (i.e., inside two years), but rates rose for all maturities. As two points of reference, the 1-year and 30-year treasury yield increased by 78 basis points and 43 basis points, respectively, over the initial three months of the reporting period.

The final three months of the reporting period (first quarter of 2000) saw the treasury yield curve fully invert (short maturity securities with higher yields than long maturity securities), with short maturity securities continuing to rise in yield while intermediate to long maturity yields fell. By March 31, 2000, the 2-year treasury yield (6.48%) was 64 basis points higher than the 30-year treasury yield (5.84%). Historically, an inverted yield curve signals an oncoming economic slowdown or recession. While there were some indications that the Federal Reserve Board's ( the "Fed") interest rate hikes in the latter half of 1999 would tend to slow economic activity in the year 2000, the U.S. Treasury also played a major role in the decline of long maturity yields. During the first quarter of 2000, the U.S. Treasury announced and acted on their intention to repurchase long maturity, high coupon treasury securities out of the marketplace, thus using part of the Federal surplus to reduce outstanding government debt. This action had the effect of providing a large and active buyer for U.S. Treasuries and served to reduce the yield (i.e., increase the price) for long maturity treasury securities. Taken as a whole, the six-month reporting period demonstrated higher interest rates for all but the very long end of the U.S. Treasury market.

From the perspective of relative fixed income sector performance, pure U.S. Treasuries were the best performers outdistancing all other high quality bond sectors. The U.S. Treasury debt buyback, along with investor nervousness brought about by continued Fed interest rate hikes, created a "flight to quality" in the bond market. As a result, most high quality "spread products" (mortgages, corporates, U.S. agencies) underperformed comparable maturity treasuries.

Federated Total Return Bond Fund was positioned neutral to slightly short of its benchmark duration target during the initial three months of the reporting period and neutral to slightly long in its duration target during the latter three months. Early in January 2000, Federated Investors, as a firm, revised its overall duration target to a more positive (i.e., longer) centering point. From a sector exposure perspective, the fund gradually reduced its allocation to "spread" sectors, but continued to maintain a "spread" product overweight versus its benchmark index, the Lehman Brothers Aggregate Bond Index. Thus, the duration positioning provided a positive relative benefit while the "spread" overweight slightly detracted from relative fund performance. For the six-month reporting period, the fund generated a 2.38%¹ total return for Institutional Shares and 2.23%¹ for Institutional Service Shares relative to a 2.08% return for the Lehman Brothers Aggregate Bond Index.²

1 Performance quoted represents past performance and is no guarantee of future results. Investment return and principal value will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than their original cost.

2 The Lehman Brothers Aggregate Bond Index is an unmanaged index measuring both the capital price changes and income provided by the underlying universe of securities, comprised of U.S. Treasury obligations, U.S. agency obligations, foreign obligations, U.S. investment-grade corporate debt and mortgage-backed obligations. Investments cannot be made in the index.

Portfolio of Investments

MARCH 31, 2000 (UNAUDITED)

Principal
Amount

Value

CORPORATE BONDS--29.8%

Automotive--0.1%

255,000

Hertz Corp., Sr. Note, 7.00%, 1/15/2028

226,165

Banking--2.1%

400,000

Bankers Trust Corp., Sub. Note, 8.25%, 5/1/2005

411,216

260,000

FirstBank Puerto Rico, Sub. Note, 7.625%, 12/20/2005

242,107

550,000

GreenPoint Bank, Sr. Note, 6.70%, 7/15/2002

538,334

1,000,000

National Bank of Canada, Montreal, Sub. Note, 8.125%, 8/15/2004

1,023,740

2,250,000

^{1, 2}

Regional Diversified Funding, Sr. Note, 9.25%, 3/15/2030

2,261,401

300,000

Summit Bancorp, Bond, 8.40%, 3/15/2027

289,530

TOTAL

4,766,328

Beverage & Tobacco--0.7%

275,000

Anheuser-Busch Cos., Inc., Note, 7.00%, 9/1/2005

268,389

1,250,000

Anheuser-Busch Cos., Inc., Sr. Note, 7.10%, 6/15/2007

1,228,275

TOTAL

1,496,664

Cable Television--0.6%

1,180,000

Continental Cablevision, Sr. Deb., 9.50%, 8/1/2013

1,306,708

Consumer Products--0.7%

1,000,000

Alberto-Culver Co., Unsecd. Note, 8.25%, 11/1/2005

1,006,390

500,000

Hershey Foods Corp., Note, 6.95%, 8/15/2012

482,530

TOTAL

1,488,920

Ecological Services & Equipment--0.6%

750,000

USA Waste Services, Inc., Note, 6.125%, 7/15/2001

720,960

300,000

USA Waste Services, Inc., Sr. Note, 7.00%, 10/1/2004

271,146

500,000

WMX Technologies, Inc., Deb., 8.75%, 5/1/2018

455,975

TOTAL

1,448,081

Education--1.4%

1,800,000

Boston University, Medium Term Note, 7.625%, 7/15/2097

1,639,026

1,000,000

Columbia University, Medium Term Note, 8.62%, 2/21/2001

1,015,080

525,000

Harvard University, Revenue Bonds, 8.125%, 4/15/2007

552,017

TOTAL

3,206,123

Electronics--0.3%

600,000

Anixter International, Inc., Company Guarantee, 8.00%, 9/15/2003

581,538

Principal
Amount

Value

CORPORATE BONDS--continued

Finance - Automotive--0.2%

500,000

Ford Motor Credit Corp., Unsub. Bond, 6.875%, 6/5/2001

497,250

Financial Intermediaries--1.7%

1,225,000

Amvescap PLC, Sr. Note, 6.60%, 5/15/2005

1,162,831

1,000,000

^{1, 2}

Fidelity Investments, Bond, 7.57%, 6/15/2029

953,880

750,000

Lehman Brothers Holdings, Inc., Bond, 7.00%, 5/15/2003

736,425

275,000

Lehman Brothers Holdings, Inc., Note, 6.90%, 1/29/2001

273,911

250,000

Lehman Brothers Holdings, Inc., Note, 8.50%, 8/1/2015

258,700

300,000

Salomon, Inc., Sr. Note, 7.75%, 5/15/2000

300,741

TOTAL

3,686,488

Financial Services--0.6%

250,000

Associates Corp. of North America, Sr. Note, 9.125%, 4/1/2000

250,107

500,000

^{1, 2}

Fertinitro Finance, Company Guarantee, 8.29%, 4/1/2020

306,565

400,000

FINOVA Capital Corp., Note, 7.40%, 6/1/2007

379,732

500,000

General Electric Capital Corp., Medium Term Note, 6.65%, 9/3/2002

495,960

TOTAL

1,432,364

Food & Drug Retailers--0.8%

1,700,000

Kroger Co., Inc., Sr. Note, 7.25%, 6/1/2009

1,621,681

150,000

Meyer (Fred), Inc., Company Guarantee, 7.45%, 3/1/2008

145,916

TOTAL

1,767,597

Forest Products--1.6%

300,000

Container Corp. of America, Sr. Note, 11.25%, 5/1/2004

304,500

350,000

Donohue Forest Products, Sr. Note, 7.625%, 5/15/2007

349,107

1,300,000

Fort James Corp., Sr. Note, 6.234%, 3/15/2001

1,291,017

1,500,000

Quno Corp., Sr. Note, 9.125%, 5/15/2005

1,575,645

TOTAL

3,520,269

Health Care--0.2%

500,000

Tenet Healthcare Corp., Sr. Sub. Note, 8.125%, 12/1/2008

460,000

Insurance--2.6%

250,000

Conseco, Inc., Note, 6.40%, 2/10/2003

233,710

250,000

Conseco, Inc., Sr. Note, 10.50%, 12/15/2004

263,627

400,000

Conseco, Inc., Sr. Sub. Note, 10.25%, 6/1/2002

404,272

600,000

Delphi Financial Group, Inc., 9.31%, 3/25/2027

563,208

400,000

Delphi Financial Group, Inc., Note, 8.00%, 10/1/2003

392,256

2,000,000

GEICO Corp., Deb., 9.15%, 9/15/2021

2,125,240

Principal
Amount

Value

CORPORATE BONDS--continued

Insurance--continued

400,000

Hartford Life, Inc., Note, 7.10%, 6/15/2007

390,020

360,000

^{1, 2}

Life Re Capital Trust I, Company Guarantee, 8.72%, 6/15/2027

360,619

1,000,000

^{1, 2}

Union Central Life Insurance Co., Note, 8.20%, 11/1/2026

980,700

TOTAL

5,713,652

Leisure & Entertainment--1.9%

1,650,000

International Speedway Corp., 7.875%, 10/15/2004

1,624,145

1,500,000

Viacom, Inc., Sr. Deb., 8.25%, 8/1/2022

1,480,920

400,000

Viacom, Inc., Sr. Note, 7.50%, 1/15/2002

401,444

800,000

Viacom, Inc., Sr. Sub. Note, 10.25%, 9/15/2001

826,736

TOTAL

4,333,245

Machinery & Equipment--1.2%

1,090,000

Caterpillar, Inc., Deb., 9.75%, 6/1/2019

1,142,124

1,500,000

Northwest Airlines Corp., 7.935%, 4/1/2019

1,525,553

TOTAL

2,667,677

Metals & Mining--1.3%

450,000

Barrick Gold Corp., Deb., 7.50%, 5/1/2007

448,672

150,000

Inco Ltd., Note, 9.60%, 6/15/2022

151,873

1,150,000

Noranda, Inc., Deb., 8.125%, 6/15/2004

1,151,035

1,200,000

^{1, 2}

Normandy Finance Ltd., Company Guarantee, 7.50%, 7/15/2005

1,099,332

TOTAL

2,850,912

Oil & Gas--2.1%

1,000,000

Husky Oil Ltd., Deb., 7.55%, 11/15/2016

943,880

250,000

Husky Oil Ltd., Sr. Note, 7.125%, 11/15/2006

235,480

1,750,000

^{1, 2}

Pemex Finance Ltd., Note, 9.03%, 2/15/2011

1,827,298

750,000

Tosco Corp., Note, 8.125%, 2/15/2030

741,900

1,000,000

^{1, 2}

Yosemite Securities Trust I, Bond, 8.25%, 11/15/2004

995,120

TOTAL

4,743,678

Pharmaceutical--0.2%

400,000

Lilly (Eli) & Co., Unsecd. Note, 6.57%, 1/1/2016

370,980

Printing & Publishing--0.6%

1,013,000

News America Holdings, Inc., Company Guarantee, 10.125%, 10/15/2012

1,108,597

300,000

News America Holdings, Inc., Company Guarantee, 8.00%, 10/17/2016

291,126

TOTAL

1,399,723

Real Estate--0.3%

750,000

Sun Communities, Inc., Medium Term Note, 6.77%, 5/16/2005

700,200

Principal
Amount

Value

CORPORATE BONDS--continued

Retailers--2.4%

750,000

Dayton-Hudson Corp., Deb., 10.00%, 12/1/2000

764,707

1,200,000

Harcourt General, Inc., Sr. Note, 6.70%, 8/1/2007

1,113,480

634,873

K Mart Corp., Pass Thru Cert., 8.54%, 1/2/2015

613,465

575,000

May Department Stores Co., Deb., 8.125%, 8/15/2035

573,666

750,000

May Department Stores Co., Deb., 9.875%, 6/15/2021

800,925

300,000

Sears, Roebuck & Co., Medium Term Note, 10.00%, 2/3/2012

338,580

650,000

Shopko Stores, Inc., 8.50%, 3/15/2002

660,257

400,000

Shopko Stores, Inc., Sr. Note, 9.25%, 3/15/2022

431,728

TOTAL

5,296,808

Services--0.2%

500,000

Stewart Enterprises, Inc., Note, 6.40%, 5/1/2003

395,135

Sovereign Government--0.6%

1,350,000

Quebec, Province of, 11.00%, 6/15/2015

1,412,788

Supranational--0.2%

500,000

Corp Andina De Fomento, Sr. Note, 7.75%, 3/1/2004

502,060

Technology Services--1.9%

1,350,000

Dell Computer Corp., Deb., 7.10%, 4/15/2028

1,245,591

2,650,000

Unisys Corp., Sr. Note, 11.75%, 10/15/2004

2,875,250

TOTAL

4,120,841

Telecommunications & Cellular--1.2%

600,000

MetroNet Communications Corp., Sr. Note, 12.00%, 8/15/2007

688,500

1,000,000

MetroNet Escrow Corp., Sr. Note, 10.625%, 11/1/2008

1,130,000

850,000

Qwest Communications International, Inc., Sr. Note, Series B, 7.50%, 11/1/2008

828,750

TOTAL

2,647,250

Utilities--1.5%

600,000

Cincinnati Gas and Electric Co., Note, 6.35%, 6/15/2003

582,468

1,050,000

^{1, 2}

Edison Mission Holding Co., Sr. Secd. Note, 8.734%, 10/1/2026

1,035,415

850,000

^{1, 2}

Israel Electric Corp. Ltd., Note, 8.25%, 10/15/2009

853,125

250,000

^{1, 2}

Israel Electric Corp. Ltd., Sr. Note, 7.875%, 12/15/2026

237,310

170,000

Puget Sound Energy, Inc., Medium Term Note, 7.02%, 12/1/2027

155,227

500,000

^{1, 2}

Tenaga Nasional Berhad, Deb., 7.50%, 1/15/2096

401,765

TOTAL

3,265,310

TOTAL CORPORATE BONDS (IDENTIFIED COST $68,069,260)

66,304,754

Principal
Amount
or Shares

Value

ASSET-BACKED SECURITIES--1.9%

Structured Product--1.7%

1,000,000

^{1, 2}

125 Home Loan Owner Trust 1998-1A, Class B1, 9.26%, 2/15/2029

873,125

2,000,000

Chase Credit Card Owner Trust, Class A, 6.66%, 1/15/2007

1,975,420

750,000

Citibank Credit Card Master Trust 1997-6, Class A, 6.323%, 8/15/2006

546,305

154,909

Green Tree Home Equity Loan Trust 1999-A, Class B2A, 7.44%, 2/15/2029

155,130

362,727

^{1, 2}

Merrill Lynch Mortgage Investors, Inc. 1998-FF3, Class BB, 5.50%, 11/20/2029

344,591

TOTAL

3,894,571

Whole Loan--0.2%

417,947

SMFC Trust Asset-Backed Certificates, Series 1997-A, Class 4, 7.7191%, 1/28/2025

350,683

TOTAL ASSET-BACKED SECURITIES (IDENTIFIED COST $4,418,165)

4,245,254

GOVERNMENT AGENCIES--3.3%

1,000,000

Federal Home Loan Bank System, 5.785%, 3/17/2003

967,320

3,750,000

Federal Home Loan Mortgage Corp., 5.75%, 3/15/2009

3,395,475

175,000

Federal Home Loan Mortgage Corp., 7.90%, 9/19/2001

177,420

390,000

Federal National Mortgage Association, 7.50%, 2/11/2002

393,420

500,000

Federal National Mortgage Association, Deb., 6.75%, 7/30/2007

483,905

350,000

Federal National Mortgage Association, Medium Term Note, 6.71%, 7/24/2001

349,209

675,000

Private Export Funding Corp., 7.30%, 1/31/2002

679,489

1,000,000

Tennessee Valley Authority, Series C, 6.00%, 3/15/2013

914,910

TOTAL GOVERNMENT AGENCIES (IDENTIFIED COST $7,505,659)

7,361,148

MUTUAL FUNDS--35.0%

244,187

The High Yield Bond Portfolio

1,995,009

7,989,651

Federated Mortgage Core Portfolio

76,061,480

TOTAL MUTUAL FUNDS (IDENTIFIED COST $80,285,930)

78,056,489

PREFERRED STOCKS--0.7%

Financial Intermediaries--0.4%

21,000

Citigroup, Inc., Cumulative Pfd.

1,008,000

Telecommunications & Cellular--0.3%

3,800

AT&T Corp., Pfd.

92,863

20,000

AT&T Corp., Pfd., $2.50

510,000

TOTAL

602,863

TOTAL PREFERRED STOCKS (IDENTIFIED COST $1,631,396)

1,610,863

Principal
Amount

Value

U.S. TREASURY--21.4%

U.S. Treasury Bonds--8.8%

2,215,000

5.25%, 11/15/2028

1,983,887

1,343,000

6.00%, 2/15/2026

1,328,106

5,940,000

6.375%, 8/15/2027

6,188,827

3,700,000

8.125%, 5/15/2021

4,544,118

1,210,000

8.75%, 5/15/2017

1,529,029

1,400,000

9.875%, 11/15/2015

1,902,740

1,400,000

11.625%, 11/15/2004

1,686,496

300,000

11.75%, 11/15/2014

413,265

TOTAL

19,576,468

U.S. Treasury Notes--12.6%

9,250,000

5.875%, 11/15/2004

9,085,998

900,000

6.00%, 8/15/2009

888,876

5,800,000

6.125%, 8/15/2007

5,746,582

2,875,000

6.25%, 2/15/2003

2,861,056

3,100,000

6.50%, 10/15/2006

3,129,016

5,000,000

6.50%, 2/15/2010

5,175,400

1,250,000

7.875%, 11/15/2004

1,323,363

TOTAL

28,210,291

TOTAL U.S. TREASURY (IDENTIFIED COST $48,278,203)

47,786,759

REPURCHASE AGREEMENT--3.8%³

8,440,000

ABN AMRO, Inc., 6.18%, dated 3/31/2000, due 4/3/2000 (at amortized cost)

8,440,000

TOTAL INVESTMENTS (IDENTIFIED COST $218,628,613)⁴

213,805,267

1 Denotes a restricted security which is subject to restrictions on resale under federal securities laws. At March 31, 2000, these securities amounted to $12,880,929 which represents 5.8% of net assets. Included in these amounts, securities which have been deemed liquid amounted to $12,530,246 which represents 5.6% of net assets.

2 Denotes a restricted security that has been deemed liquid by criteria approved by the fund's Board of Directors.

3 The repurchase agreement is fully collateralized by U.S. government and/or agency obligations based on market prices at the date of the portfolio. The investment in the repurchase agreement is through participation in a joint account with other Federated funds.

4 The cost of investments for federal tax purposes amounts to $218,628,613. The net unrealized depreciation of investments on a federal tax basis amounts to $4,823,346 which is comprised of $496,979 appreciation and $5,320,325 depreciation at March 31, 2000.

Note: The categories of investments are shown as a percentage of net assets ($222,896,291) at March 31, 2000.

See Notes which are an integral part of the Financial Statements

Statement of Assets and Liabilities

MARCH 31, 2000 (UNAUDITED)

Assets:

Total investments in securities, at value (identified and tax cost $218,628,613)

213,805,267

Cash

1,681

Income receivable

2,857,189

Receivable for shares sold

8,338,072

TOTAL ASSETS

225,002,209

Liabilities:

Payable for investments purchased

998,800

Income distribution payable

1,086,486

Accrued expenses

20,632

TOTAL LIABILITIES

2,105,918

Net assets for 22,133,325 shares outstanding

222,896,291

Net Assets Consist of:

Paid in capital

228,541,901

Net unrealized depreciation of investments

(4,823,346

)

Accumulated net realized loss on investments

(835,580

)

Undistributed net investment income

13,316

TOTAL NET ASSETS

222,896,291

Net Asset Value, Offering Price and Redemption Proceeds Per Share

Institutional Shares:

$174,003,500 ÷ 17,278,163 shares outstanding

$10.07

Institutional Service Shares:

$48,892,791 ÷ 4,855,162 shares outstanding

$10.07

See Notes which are an integral part of the Financial Statements

Statement of Operations

SIX MONTHS ENDED MARCH 31, 2000 (UNAUDITED)

Investment Income:

Dividends

2,238,850

Interest

3,908,682

TOTAL INCOME

6,147,532

Expenses:

Investment adviser fee

348,197

Administrative personnel and services fee

65,731

Custodian fees

7,130

Transfer and dividend disbursing agent fees and expenses

15,752

Directors'/Trustees' fees

1,567

Auditing fees

4,655

Legal fees

958

Portfolio accounting fees

30,508

Distribution services fee--Institutional Service Shares

26,643

Shareholder services fee--Institutional Shares

190,980

Shareholder services fee--Institutional Service Shares

26,643

Share registration costs

21,485

Printing and postage

9,991

Insurance premiums

609

Taxes

2,279

Miscellaneous

4,966

TOTAL EXPENSES

758,094

Waivers:

Waiver of investment adviser fee

(209,156

)

Waiver of distribution services fee--Institutional Service Shares

(21,314

)

Waiver of shareholder services fee--Institutional Shares

(190,980

)

TOTAL WAIVERS

(421,450

)

Net expenses

336,644

Net investment income

5,810,888

Realized and Unrealized Loss on Investments:

Net realized loss on investments

(807,339

)

Net change in unrealized depreciation of investments

(417,470

)

Net realized and unrealized loss on investments

(1,224,809

)

Change in net assets resulting from operations

4,586,079

See Notes which are an integral part of the Financial Statements

Statement of Changes in Net Assets

Six Months
Ended
(unaudited)
March 31,
2000

Year
Ended
September 30,
1999

Increase (Decrease) in Net Assets

Operations:

Net investment income

5,810,888

8,357,398

Net realized gain (loss) on investments ($(807,339) and $142,809, respectively, as computed for federal tax purposes)

(807,339

)

115,242

Net change in unrealized depreciation

(417,470

)

(9,393,410

)

CHANGE IN NET ASSETS RESULTING FROM OPERATIONS

4,586,079

(920,770

)

Distributions to Shareholders:

Distributions from net investment income

Institutional Shares

(5,152,903

)

(7,367,196

)

Institutional Service Shares

(692,343

)

(940,617

)

Distributions from net realized gain on investments

Institutional Shares

(118,283

)

(203,445

)

Institutional Service Shares

(13,272

)

(25,544

)

CHANGE IN NET ASSETS RESULTING FROM DISTRIBUTIONS TO SHAREHOLDERS

(5,976,801

)

(8,536,802

)

Share Transactions:

Proceeds from sale of shares

114,017,524

159,738,857

Net asset value of shares issued to shareholders in payment of distributions declared

1,447,035

2,573,271

Cost of shares redeemed

(57,980,953

)

(97,972,705

)

CHANGE IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS

57,483,606

64,339,423

Change in net assets

56,092,884

54,881,851

Net Assets:

Beginning of period

166,803,407

111,921,556

End of period (including undistributed net investment income of $13,316 and $47,674, respectively)

222,896,291

166,803,407

See Notes which are an integral part of the Financial Statements

Financial Highlights--Institutional Shares

(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)

Six Months
Ended
(unaudited)
March 31,

Year Ended September 30,

2000

1999

1998

1997

Net Asset Value, Beginning of Period

$10.18

$10.90

$10.32

$10.00

Income From Investment Operations:

Net investment income

0.34

0.63

0.64

0.72

Net realized and unrealized gain (loss) on investments

(0.10

)

(0.70

)

0.58

0.32

TOTAL FROM INVESTMENT OPERATIONS

0.24

(0.07

)

1.22

1.04

Less Distributions:

Distributions from net investment income

(0.34

)

(0.63

)

(0.64

)

(0.72

)

Distributions from net realized gain on investments

(0.01

)

(0.02

)

TOTAL DISTRIBUTIONS

(0.35

)

(0.65

)

(0.64

)

(0.72

)

Net Asset Value, End of Period

$10.07

$10.18

$10.90

$10.32

Total Return²

2.38

(0.63

12.21

10.52

Ratios to Average Net Assets:

Expenses

0.35

%³

0.35

0.32

0.01

Net investment income

6.70

%³

6.10

6.03

7.15

Expense waiver/reimbursement⁴

0.49

%³

0.62

1.09

4.39

Supplemental Data:

Net assets, end of period (000 omitted)

$174,004

$145,428

$98,496

$16,700

Portfolio turnover

101

1 For the year ended September 30, 1999, the fund was audited by Deloitte & Touche LLP. Each of the previous years was audited by other auditors.

2 Based on net asset value, which does not reflect the sales charge or contingent deferred sales charge, if applicable.

3 Computed on an annualized basis.

4 This voluntary expense decrease is reflected in both the expense and the net investment income ratios shown above.

See Notes which are an integral part of the Financial Statements

Financial Highlights--Institutional Service Shares

(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)

Six Months
Ended
(unaudited)
March 31,

Year Ended September 30,

2000

1999

1998

1997

Net Asset Value, Beginning of Period

$10.18

$10.90

$10.32

$10.00

Income From Investment Operations:

Net investment income

0.32

0.60

0.61

0.69

Net realized and unrealized gain (loss) on investments

(0.10

)

(0.70

)

0.58

0.32

TOTAL FROM INVESTMENT OPERATIONS

0.22

(0.10

)

1.19

1.01

Less Distributions:

Distributions from net investment income

(0.32

)

(0.60

)

(0.61

)

(0.69

)

Distributions from net realized gain on investments

(0.01

)

(0.02

)

TOTAL DISTRIBUTIONS

(0.33

)

(0.62

)

(0.61

)

(0.69

)

Net Asset Value, End of Period

$10.07

$10.18

$10.90

$10.32

Total Return²

2.23

(0.93

11.87

10.22

Ratios to Average Net Assets:

Expenses

0.65

%³

0.65

0.63

0.31

Net investment income

6.47

%³

5.80

5.70

6.71

Expense waiver/reimbursement⁴

0.44

%³

0.57

1.03

4.59

Supplemental Data:

Net assets, end of period (000 omitted)

$48,893

$21,376

$13,425

$2,289

Portfolio turnover

101

1 For the year ended September 30, 1999, the fund was audited by Deloitte & Touche LLP. Each of the previous years was audited by other auditors.

2 Based on net asset value, which does not reflect the sales charge or contingent deferred sales charge, if applicable.

3 Computed on an annualized basis.

4 This voluntary expense decrease is reflected in both the expense and the net investment income ratios shown above.

See Notes which are an integral part of the Financial Statements

Notes to Financial Statements

MARCH 31, 2000 (UNAUDITED)

ORGANIZATION

Federated Total Return Series, Inc. (the "Corporation") is registered under the Investment Company Act of 1940, as amended (the "Act") as an open-end, management investment company. The Corporation consists of four portfolios. The financial statements included herein are only those of Federated Total Return Bond Fund (the "Fund"), a diversified portfolio. The financial statements of the other portfolios are presented separately. The assets of each portfolio are segregated and a shareholder's interest is limited to the portfolio in which shares are held. The Fund offers two classes of shares: Institutional Shares and Institutional Service Shares. The investment objective of the Fund is to provide total return.

SIGNIFICANT ACCOUNTING POLICIES

Investment Valuation

Municipal bonds are valued by an independent pricing service, taking into consideration yield, liquidity, risk, credit quality, coupon, maturity, type of issue, and any factors or market data the pricing service deems relevant. U.S. government securities, listed corporate bonds, other fixed income securities, asset-backed securities, unlisted securities and private placement securities are generally valued at the mean of the latest bid and asked price as furnished by an independent pricing service. Short-term securities are valued at the prices provided by independent pricing service. However, short-term securities with remaining maturities of 60 days or less at the time of purchase may be valued at amortized cost, which approximates fair market value. Investments in other open-end regulated investment companies are valued at net asset value.

Pursuant to an Exemptive order, the Fund may invest in Federated Core Trust (the "Trust") which is also managed by Federated Investment Management Company, the Fund's adviser. The Trust is an open-end management investment company under the Investment Company Act of 1940 available only to registered investment companies and other institutional investors. High Yield Bond Portfolio and Federated Mortgage Core Portfolio (the "Portfolios") are two series of the Trust. Federated receives no fees on behalf of the Portfolios. Income distributions from the Portfolios are declared daily and paid monthly. Income distributions earned by the Fund are recorded as dividend income in the accompanying financial statements. Additional information regarding High Yield Bond Portfolio and Federated Mortgage Core Portfolio is available upon request.

Repurchase Agreements

Investment Income, Expenses and Distributions

Interest income and expenses are accrued daily. Bond premium and discount, if applicable, are amortized as required by the Internal Revenue Code, as amended (the "Code"). Dividend income and distributions to shareholders are recorded on the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at fair value. The Fund offers multiple classes of shares, which differ in their respective distribution and service fees. All shareholders bear the common expenses of the Fund based on average daily net assets of each class, without distinction between share classes. Dividends are declared separately for each class. No class has preferential dividend rights; differences in per share dividend rates are generally due to differences in separate class expenses.

Federal Taxes

When-Issued and Delayed Delivery Transactions

Restricted Securities

Additional information on each restricted security held at March 31, 2000 is as follows:

Security

Acquisition Date

Acquisition Cost

SMFC Trust

2/4/1998

$354,675

Use of Estimates

Other

Investment transactions are accounted for on a trade date basis.

CAPITAL STOCK

At March 31, 2000, par value shares ($0.001 per share) authorized were as follows:

Share Class Name		Number of Par Value Capital Stock Authorized
Institutional Shares		1,000,000,000
Institutional Service Shares		1,000,000,000
TOTAL		2,000,000,000

Transactions in capital stock were as follows:

Six Months Ended
March 31, 2000

Year Ended
September 30, 1999

Institutional Shares:

Shares

Amount

Shares

Amount

Shares sold

7,647,850

76,661,549

12,649,367

132,633,835

Shares issued to shareholders in payment of distributions declared

107,308

1,077,611

174,918

1,826,335

Shares redeemed

(4,757,308

)

(47,815,272

)

(7,577,001

)

(79,157,964

)

NET CHANGE RESULTING FROM INSTITUTIONAL SHARE TRANSACTIONS

2,997,850

29,923,888

5,247,284

55,302,206

Six Months Ended
March 31, 2000

Year Ended
September 30, 1999

Institutional Service Shares:

Shares

Amount

Shares

Amount

Shares sold

3,731,676

37,355,975

2,597,077

27,105,022

Shares issued to shareholders in payment of distributions declared

36,810

369,424

71,343

746,936

Shares redeemed

(1,012,447

)

(10,165,681

)

(1,800,528

)

(18,814,741

)

NET CHANGE RESULTING FROM INSTITUTIONAL SERVICE SHARE TRANSACTIONS

2,756,039

27,559,718

867,892

9,037,217

NET CHANGE RESULTING FROM SHARE TRANSACTIONS

5,753,889

57,483,606

6,115,176

64,339,423

INVESTMENT ADVISER FEE AND OTHER TRANSACTIONS WITH AFFILIATES

Investment Adviser Fee

Federated Investment Management Company, the Fund's investment adviser (the "Adviser"), receives for its services an annual investment adviser fee equal to 0.40% of the Fund's average daily net assets. The Adviser may voluntarily choose to waive any portion of its fee. The Adviser can modify or terminate this voluntary waiver at any time at its sole discretion.

Administrative Fee

Federated Services Company ("FServ"), under the Administrative Services Agreement, provides the Fund with administrative personnel and services. The fee paid to FServ is based on a scale that ranges from 0.15% to 0.075% of the average aggregate daily net assets of all funds advised by subsidiaries of Federated Investors, Inc., subject to a $125,000 minimum per portfolio and $30,000 per each additional class.

Distribution Services Fee

The Fund has adopted a Distribution Plan (the "Plan") pursuant to Rule 12b-1 under the Act. Under the terms of the Plan, the Fund will compensate Federated Securities Corp. ("FSC"), the principal distributor, from the net assets of the Institutional Service Shares to finance activities intended to result in the sale of the Fund's Institutional Service Shares. The Plan provides that the Fund may incur distribution expenses up to 0.25% of the average daily net assets of the Institutional Service Shares annually, to compensate FSC. The distributor may voluntarily choose to waive any portion of its fee. The distributor can modify or terminate this voluntary waiver at any time at its sole discretion.

Shareholder Services Fee

Transfer and Dividend Disbursing Agent Fees and Expenses

Portfolio Accounting Fees

FServ maintains the Fund's accounting records for which it receives a fee. The fee is based on the level of the Fund's average daily net assets for the period, plus out-of-pocket expenses.

Interfund Transactions

During the six months ended March 31, 2000, the Fund engaged in purchase and sale transactions with funds that have a common investment adviser (or affiliated investment advisers), common Directors/Trustees, and/or common Officers. These purchase and sale transactions complied with Rule 17a-7 under the Act and amounted to $39,792,659 and $16,500,000, respectively.

General

Certain of the Officers and Directors of the Corporation are Officers and Directors or Trustees of the above companies.

INVESTMENT TRANSACTIONS

Purchases and sales of investments, excluding short-term securities (and in-kind contributions), for the six months ended March 31, 2000, were as follows:

Purchases	$	100,847,470

Sales	$	56,753,908

Directors

JOHN F. DONAHUE

THOMAS G. BIGLEY

JOHN T. CONROY, JR.

NICHOLAS P. CONSTANTAKIS

JOHN F. CUNNINGHAM

J. CHRISTOPHER DONAHUE

LAWRENCE D. ELLIS, M.D.

PETER E. MADDEN

CHARLES F. MANSFIELD, JR.

JOHN E. MURRAY, JR., J.D., S.J.D.

MARJORIE P. SMUTS

JOHN S. WALSH

Officers

JOHN F. DONAHUE

Chairman

GLEN R. JOHNSON

President

WILLIAM D. DAWSON III

Chief Investment Officer

J. CHRISTOPHER DONAHUE

Executive Vice President

EDWARD C. GONZALES

Executive Vice President

JOHN W. MCGONIGLE

Executive Vice President and Secretary

RICHARD J. THOMAS

Treasurer

C. GRANT ANDERSON

Assistant Secretary

Federated
World-Class Investment Manager

SEMI-ANNUAL REPORT

Federated Total Return Bond Fund

SEMI-ANNUAL REPORT TO SHAREHOLDERS

MARCH 31, 2000

Federated
Federated Total Return Bond Fund
Federated Investors Funds
5800 Corporate Drive
Pittsburgh, PA 15237-7000
1-800-341-7400
www.federatedinvestors.com
Federated Securities Corp., Distributor

Cusip 31428Q101
Cusip 31428Q507

G01664-01 (5/00)

SEMI-ANNUAL REPORT

President's Message

Dear Investor:

I am pleased to present the Semi-Annual Report to shareholders for Federated Ultrashort Bond Fund, a portfolio of Federated Total Return Series, Inc., which covers the six-month reporting period from October 1, 1999 through March 31, 2000. The report includes commentary by the fund's portfolio manager, followed by the portfolio of investments and financial statements.

This fund pursues a competitive level of current income, with a low level of principal volatility, through a diversified portfolio of debt obligations with a weighted average effective duration of less than one year.

As a result, the fund can pursue higher yields than money market funds generally offer, with the potential for modest principal fluctuation in exchange for modest credit risk.

During the reporting period, the fund's Institutional Service Shares produced a total return of 2.48%.¹ Dividends paid by the fund's Institutional Service Shares during this reporting period totaled $0.06 per share, while capital gains totaled $0.005 per share. The net asset value of Institutional Service Shares began the reporting period at $1.98 and ended the period at $1.96. This report also contains information about Institutional Shares, a new share class that began operation on February 22, 2000.¹ The fund's total net assets reached $218 million on the last day of the reporting period.

Thank you for participating in the conservative income opportunities of Federated Ultrashort Bond Fund. As always, we welcome your questions and comments.

Sincerely,

Glen R. Johnson

Glen R. Johnson
President
May 15, 2000

1 Past performance is no guarantee of future results. Investment return and principal value will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than their original cost. For the period from February 22, 2000 (date of initial public offering) to March 31, 2000, the fund's Institutional Shares produced a total return of 0.74%.

Investment Review

Federated Ultrashort Bond Fund represents an average investment grade quality fixed income portfolio having an effective duration not to exceed one year. Investments are concentrated in corporate, asset backed and mortgage backed debt securities. The fund may also allocate a combined 25% of assets in either or both of the high yield corporate and international bond sectors.¹

The reporting period was characterized by uncertainty if nothing else. The "Y2K malaise" which had caused credit markets to do poorly beginning in the first half of calendar 1999, had pretty much run its course by the middle of October. As investors slowly began to realize there would be no great dislocation attributable to Y2K, credit markets actually began to rally. Investors who had stayed on the sidelines tried to invest without success since issuers had already completed their funding requirements through year-end. Credit spreads tightened versus U.S. Treasury Securities, and this phenomenon lasted until approximately mid-February 2000. At that point however, spreads once again began to widen. A combination of equity market volatility, Treasury buybacks and investors uncertain as to how to deal with an economy in uncharted growth waters, seemed to be the culprit. This is the current environment as the fund moves into the middle of the year 2000.

From the standpoint of investor outcome, the fund handled the market's gyrations reasonably well. The fund's Institutional Service Shares returned 2.48%² for the six-month reporting period ended March 31, 2000, compared to 2.59% for the Lipper Ultrashort Debt category³ and 1.95% on the Merrill Lynch 1-Year U.S. Treasury Bill Index⁴ over the same period. The fund's slightly weaker performance relative to its peer group can be attributed to a longer average duration during a period where the yield on the one-year Treasury security increased by over a full percent percentage point (from 5.22% on September 30, 1999, to 6.28% at March 31, 2000).

1 Special risks are associated with investments in high yield and international securities.

2 Past performance is no guarantee of future results. Investment return and principal value will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than their original cost. The fund's Institutional Shares total return for the period from February 22, 2000 (date of initial public offering) to March 31, 2000 was 0.74%.

3 Lipper figures represent the average of the total returns reported by all of the mutual funds designated by Lipper Analytical Services, Inc. as falling into the respective categories indicated. Lipper figures do not reflect sales charges.

4 The Merrill Lynch 1-Year U.S. Treasury Bill Index is an unmanaged index tracking one-year U.S. government securities. The index is produced by Merrill Lynch, Pierce, Fenner and Smith, Inc. Investments cannot be made in an index.

One of the biggest positive contributors to performance was the improvement of the subordinate asset backed securities market, a sector which had lagged substantially for the better part of the prior two years. The fund's performance is also encouraging in light of the poor performance of the corporate bond market in the latter stages of the reporting period under review.

The fund's current posture would be considered neutral to slightly negative with regard to interest rate risk exposure, and neutral with regard to credit exposure. The combination of AAA-rated securities and the fund's cash position comprised over 57% of total assets at March 31, 2000, with under 7% of the fund invested in non-investment grade assets. Since fund management believes that the Federal Reserve Board will maintain a fairly aggressive bias toward higher Federal Funds rate targets, management feels it is better to maintain a more conservative posture with regard to duration. With regard to sector allocation, asset backed securities continue to receive the largest amount of fund exposure, followed by corporates. Mortgage backed securities are being de-emphasized in favor of like-duration asset backed securities, which are perceived to have better convexity characteristics. Mortgage backed securities currently account for less than 20% of fund exposure.

Portfolio of Investments

MARCH 31, 2000 (UNAUDITED)

Principal
Amount

Value

ASSET-BACKED SECURITIES--51.9%

Automobile--14.4%

817,594

AFG Receivables Trust 1996-D, Class A, 6.10%, 10/15/2001

815,280

1,000,000

Ford Credit Auto Loan Master Trust 1995-1 A, Class A, 6.50%, 8/15/2002

999,580

2,000,000

Harley-Davidson Eaglemark Motorcycle Trust 1998-2, Class A2, 5.87%, 4/15/2004

1,978,860

2,000,000

Harley-Davidson Eaglemark Motorcycle Trust 1999-1, Class A4, 5.52%, 2/15/2005

1,941,060

150,132

Household Auto Revolving Trust I 1998-1, Class B1, 6.30%, 5/17/2005

147,974

5,000,000

Household Auto Revolving Trust I 1999-1, Class A3, 6.33%, 6/17/2003

4,953,600

3,500,000

MMCA Auto Trust 1999-2, Class A2, 6.80%, 8/15/2003

3,488,853

5,000,000

Mellon Auto Grantor Trust 2000-1, Class B, 7.43%, 10/15/2006

4,996,900

3,000,000

Nissan Auto Receivables Owner Trust 1999-A, Class A3, 6.47%, 9/15/2003

2,975,655

3,200,000

Toyota Auto Receivables 1999-A Owner Trust, Class C, 6.70%, 8/16/2004

3,191,360

6,000,000

WFS Financial 1999-C Owner Trust, Class A2, 6.92%, 1/20/2004

5,975,040

TOTAL

31,464,162

Credit Card--10.4%

1,200,000

Circuit City Credit Card Master Trust 1995-1, Class A, 6.38%, 8/15/2005

1,197,360

3,000,000

Circuit City Credit Card Master Trust 2000-1, Class CTFS, 7.08%, 2/15/2006

3,002,580

5,000,000

Citibank Credit Card Master Trust I 1998-6, Class A, 5.85%, 4/10/2003

4,952,800

2,000,000

MBNA Master Credit Card Trust 1997-F, Class A, 6.60%, 11/15/2004

1,982,800

4,000,000

MBNA Master Credit Card Trust 1999-I, Class A, 6.40%, 1/18/2005

3,939,840

2,750,000

MBNA Master Credit Card Trust 1999-K, Class C, 6.95%, 3/15/2005

2,753,438

5,000,000

Providian Master Trust 1999-2, Class A, 6.60%, 4/16/2007

4,940,900

TOTAL

22,769,718

Home Equity Loan--15.6%

750,000

125 Home Loan Owner Trust 1998-1A, Class B-2, 12.16%, 2/15/2029

635,976

500,000

Amresco Residential Securities Mortgage Loan Trust 1996-1, Class A5, 7.05%, 4/25/2027

493,356

1,000,000

Chase Funding Mortgage Loan 1999-1, Class IIB, 8.88% 6/25/2028

991,370

1,000,000

Cityscape Home Equity Loan Trust 1997-1, Class A4, 7.23%, 3/25/2018

982,265

246,985

ContiMortgage Home Equity Loan Trust 1994-4, Class A6, 8.27%, 12/15/2024

247,101

1,000,000

ContiMortgage Home Equity Loan Trust 1997-1, Class A7, 7.32%, 9/15/2021

992,031

250,000

ContiMortgage Home Equity Loan Trust 1997-5, Class B, 7.62%, 1/15/2029

214,141

5,000,000

ContiMortgage Home Equity Loan Trust 1999-3, Class A2, 6.77%, 1/25/2018

4,893,750

300,000

EQCC Home Equity Loan Trust 1995-4, Class A4, 6.95%, 3/15/2012

299,538

Principal
Amount

Value

ASSET-BACKED SECURITIES--continued

Home Equity Loan--continued

1,100,000

EQCC Home Equity Loan Trust 1995-4, Class A5, 7.25%, 3/15/2026

1,097,586

907,000

EQCC Home Equity Loan Trust 1997-2, Class A7, 6.89%, 2/15/2020

899,671

500,000

GE Capital Mortgage Services, Inc. 1997-HE4, Class A5, 6.80%, 12/25/2017

488,840

1,000,000

Green Tree Home Equity Loan Trust 1999-A, Class A3, 5.98%, 4/15/2018

968,560

235,661

Green Tree Home Improvement Loan Trust 1995-C, Class B1, 7.20%, 7/15/2020

231,065

220,000

Green Tree Home Improvement Loan Trust 1997-E, Class HEA, 6.61%, 1/15/2029

218,604

262,120

Headlands Home Equity Loan Trust 1998-2, Class A3, 6.67%, 12/15/2024

253,027

2,000,000

Mellon Bank Home Equity Installment Loan 1999-1, Class B, 6.95%, 3/25/2015

1,867,940

2,278,511

Merrill Lynch Mortgage Investors, Inc. 1998-FF3, Class BB, 5.50%, 11/20/2029

2,164,585

315,481

NC Finance Trust 1999-1, Class B, 8.75%, 1/25/2029

302,270

2,518,645

Option One Mortgage Securities Corp. 1999-3, Class CTFS, 10.80%, 12/26/2029

2,495,032

3,000,000

Salomon Brothers Mortgage Sec. VII 1999-3, Class M3, 9.38%, 5/25/2029

3,000,000

2,500,000

Salomon Brothers Mortgage Sec. VII 1999-NC2, Class M3, 9.38%, 4/25/2029

2,500,000

3,000,000

Salomon Brothers Mortgage Sec. VII 1999-NC3, Class M3, 9.23%, 7/25/2029

3,000,000

1,900,000

Saxon Asset Securities Trust 1998-1, Class BF2, 8.00%, 12/25/2027

1,681,975

800,000

Saxon Asset Securities Trust 1999-1, Class BV1, 8.88%, 2/25/2029

806,496

1,452,667

Saxon Asset Securities Trust 1999-2, Class BV1, 8.31%, 9/25/2001

1,449,297

35,000

The Money Store Home Equity Trust 1996-B, Class A7, 7.55%, 2/15/2020

35,047

21,234

The Money Store Home Equity Trust 1995-C, Class A3, 6.55%, 9/15/2021

21,150

70,000

The Money Store Home Equity Trust 1997-D, Class AV2, 6.49%, 10/15/2026

69,651

184,252

The Money Store Home Equity Trust 1998-B, Class AF4, 6.12%, 6/15/2021

177,402

500,000

UCFC Home Equity Loan Trust 1997-C, Class A5, 6.88%, 9/15/2022

490,165

TOTAL

33,967,891

Manufactured Housing--6.5%

2,539,384

Bankamerica Manufactured Housing Contract Trust 1996-1, Class A3, 6.95%, 10/10/2026

2,544,133

1,070,162

Green Tree Financial Corp. 1993-4, Class B1, 7.20%, 1/15/2019

1,051,156

148,281

Green Tree Financial Corp. 1994-5, Class A4, 7.95%, 11/15/2019

149,416

500,000

Green Tree Financial Corp. 1994-7, Class A6, 8.95%, 3/15/2020

518,315

250,000

Green Tree Financial Corp. 1995-3, Class B1, 7.85%, 8/15/2025

249,655

769,074

Green Tree Financial Corp. 1996-10, Class A4, 6.42%, 11/15/2028

765,113

500,000

Green Tree Financial Corp. 1997-3, Class B1, 7.51%, 7/15/2028

467,755

450,000

Green Tree Financial Corp. 1997-4, Class A4, 6.65%, 2/15/2029

447,552

1,500,000

Green Tree Financial Corp. 1997-4, Class B1, 7.23%, 2/15/2029

1,350,435

Principal
Amount

Value

ASSET-BACKED SECURITIES--continued

Manufactured Housing--continued

460,953

Indymac Manufactured Housing Contract 1997-1, Class A3, 6.61%, 2/25/2028

456,297

4,000,000

Merit Securities Corp. 12, Class 1, 7.98%, 7/28/2033

3,667,500

2,000,000

Merit Securities Corp. 13, Class A4, 7.88%, 12/28/2033

1,985,000

42,570

Vanderbilt Mortgage Finance 1995-B, Class A3, 6.68%, 5/7/2006

42,525

500,000

Vanderbilt Mortgage Finance 1999-A, Class 2B2, 8.54%, 6/7/2016

492,050

TOTAL

14,186,902

Other--5.0%

5,000,000

Copelco Capital Funding LLC 1999-B, Class A3, 6.61%, 12/18/2002

4,975,125

1,089,737

Fleetwood Credit Corp. Grantor Trust 1993-A, Class A, 6.00%, 1/15/2008

1,062,576

443,111

Fleetwood Credit Corp. Grantor Trust 1993-B, Class A, 4.95%, 8/15/2008

428,340

295,430

Green Tree Recreational Equipment & Consumer Trust Series 1996-A, Class B, 5.95%, 2/15/2018

277,427

81,122

Green Tree Recreational Equipment & Consumer Trust Series 1997-B, Class A1, 6.55%, 7/15/2028

79,462

1,530,313

NationsCredit Grantor Trust 1997-1, Class A, 6.75%, 8/15/2013

1,528,951

1,269,913

Newcourt Equipment Trust Securities 1998-2, Class D, 7.21%, 9/15/2007

1,250,553

1,287,315

Newcourt Receivables Asset Trust 1997-1, Class A4, 6.193%, 5/20/2005

1,277,718

TOTAL

10,880,152

TOTAL ASSET-BACKED SECURITIES (IDENTIFIED COST $120,533,541)

113,268,825

COLLATERALIZED MORTGAGE OBLIGATIONS--17.9%

Whole Loan--17.9%

759,416

Bayview Financial Acquisition Trust 1998-1, Class MI1, 7.52%, 5/25/2029

714,326

478,814

Bayview Financial Acquisition Trust 1998-1, Class MII-1, 6.88%, 5/25/2029

465,496

624,295

Bear Stearns Mortgage Securities, Inc. 1996-8, Class B3, 8.00%, 11/25/2027

619,993

269,389

C-BASS ABS, LLC Series 1998-3, Class AF, 6.50%, 1/25/2033

253,478

3,397,876

C-BASS ABS, LLC Series 1999-3, Class B1, 5.38%, 2/3/2029

2,692,817

1,616,673

Countrywide Home Loans 1999-5, Class A1, 6.75%, 5/25/2028

1,542,330

2,416,730

GE Capital Mortgage Services, Inc. 1994-27, Class A3, 6.50%, 7/25/2024

2,391,270

67,998

GE Capital Mortgage Services, Inc. 1998-11, Class 1A13, 6.75%, 6/25/2028

67,269

894,235

Greenwich Capital Acceptance 1994-C, Class B1, 6.69%, 1/25/2025

887,914

2,200,000

Homeside Mortgage Securities, Inc. 1998-1, Class A2, 6.75%, 2/25/2028

2,064,119

100,000

Mellon Residential Funding Corp. 1998-TBC1, Class B4, 6.5947%, 10/25/2028

74,500

722,281

Norwest Asset Securities Corp. 1998-2, Class A1, 6.50%, 2/25/2028

685,047

4,437,394

PNC Mortgage Securities Corp. 1999-5, Class 2A1, 6.75%, 7/25/2029

4,221,781

517,448

Resecuritization Mortgage Trust 1998-A, Class B3, 7.85%, 10/26/2023

440,477

Principal
Amount

Value

COLLATERALIZED MORTGAGE OBLIGATIONS--continued

Whole Loan--continued

1,000,000

Residential Accredit Loans, Inc. 1997-QS12, Class A6, 7.25%, 11/25/2027

970,937

211,731

Residential Accredit Loans, Inc. 1998-QS14, Class A1, 6.75%, 10/25/2028

208,890

3,935,767

Residential Accredit Loans, Inc. 1998-QS14, Class A2, 6.50%, 10/25/2028

3,683,366

5,703,387

Residential Asset Securitization Trust 1997-A3, Class A13, 6.92%, 5/25/2027

5,429,967

359,251

Residential Asset Securitization Trust 1998-A12, Class A1, 6.75%, 11/25/2028

354,836

481,210

Residential Asset Securitization Trust 1998-A5, Class A1, 6.75%, 6/25/2028

468,465

659,878

Residential Asset Securitization Trust 1998-A6, Class IA7, 6.75%, 7/25/2028

645,806

1,299,840

Residential Funding Mortgage Securities I 1994-S13, Class M1, 7.00%, 5/25/2024

1,256,282

1,212,692

Residential Funding Mortgage Securities I 1995-S4, Class M1, 8.00%, 4/25/2010

1,214,038

1,500,000

Residential Funding Mortgage Securities I 1996-S1, Class A11, 7.10%, 1/25/2026

1,449,315

483,192

Residential Funding Mortgage Securities I 1996-S25, Class M3, 7.75%, 12/25/2026

478,775

6,219,177

Structured Asset Securities Corp. 1999-ALS2, Class A2, 6.75%, 7/25/2029

5,873,464

TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS (IDENTIFIED COST $40,988,917)

39,154,958

CORPORATE BONDS--15.7%

Finance - Automotive--0.9%

2,000,000

Ford Motor Credit Co., Unsecd. Note, 7.75%, 11/15/2002

2,026,380

Finance - Retail--4.2%

3,000,000

Banco Latinoamericano SA, Note, 7.20%, 5/15/2002

2,973,783

4,200,000

Corp Andina De Fomento, Bond, 7.38%, 7/21/2000

4,205,628

2,000,000

Wells Fargo Co., Note, 6.50%, 9/3/2002

1,965,280

TOTAL

9,144,691

Financial Intermediaries--0.9%

1,000,000

Lehman Brothers Holdings, Inc., Medium Term Note, 6.38%, 3/15/2001

990,480

1,000,000

Lehman Brothers, Inc., Sr. Sub. Note, 7.00%, 10/1/2002

985,680

TOTAL

1,976,160

Insurance--0.5%

1,000,000

Conseco, Inc., Sr. Note, 7.88%, 12/15/2000

996,890

Technology Services--1.3%

2,625,000

Unisys Corp., Sr. Note, 11.75%, 10/15/2004

2,848,125

Telecommunications & Cellular--2.9%

4,000,000

Cox Communications, Inc., Note, 6.38%, 6/15/2000

4,001,440

2,000,000

MetroNet Communications Corp., Sr. Note, 12.00%, 8/15/2007

2,295,000

TOTAL

6,296,440

Principal
Amount
or Shares

Value

CORPORATE BONDS--continued

Utilities--5.0%

4,000,000

Detroit Edison Co., 6.52%, 7/28/2000

4,000,000

2,000,000

Pennsylvania Power & Light Co., Note, 7.70%, 11/15/2002

1,984,420

5,000,000

Potomac Capital Investment Corp., Medium Term Note, 7.55%, 11/19/2001

4,983,300

TOTAL

10,967,720

TOTAL CORPORATE BONDS (IDENTIFIED COST $28,364,108)

34,256,406

GOVERNMENTS/AGENCIES--0.8%

1,845,000

Brazil, Government of, IDU, 7.00%, 1/1/2001 (identified cost $1,715,352)

1,838,081

MUTUAL FUND--5.3%

1,420,012

High Yield Bond Portfolio (identified cost $13,063,442)

11,601,499

PREFERRED STOCK--0.6%

Telecommunications & Cellular--0.6%

50,000

TCI Communications Financing I TR Originated PFD Secs. (identified cost $1,310,000)

1,221,875

REPURCHASE AGREEMENT--7.2%²

15,695,000

ABN AMRO, Inc., 6.18%, dated 3/31/2000, due 4/3/2000 (at amortized cost)

15,695,000

TOTAL INVESTMENTS (IDENTIFIED COST $221,670,360)³

217,036,644

1 Denotes a restricted security which is subject to restrictions on resale under federal securities laws. These securities have been deemed liquid based upon criteria approved by the fund's Board of Directors. At March 31, 2000, these securities amounted to $21,664,025 which represents 9.92% of net assets.

2 The repurchase agreement is fully collateralized by U.S. Treasury and/or agency obligations based on market prices at the date of the portfolio. The investment in the repurchase agreement is through participation in joint accounts with other Federated funds.

3 The cost of investments for federal tax purposes amounts to $221,670,360. The net unrealized depreciation of investments on a federal tax basis amounts to $4,633,716 which is comprised of $191,833 appreciation and $4,825,549 depreciation at March 31, 2000.

Note: The categories of investments are shown as a percentage of net assets ($218,330,637) at March 31, 2000.

See Notes which are an integral part of the Financial Statements

Statement of Assets and Liabilities

MARCH 31, 2000 (UNAUDITED)

Assets:

Total investments in securities, at value (identified and tax cost $221,670,360)

217,036,644

Income receivable

2,681,178

Receivable for daily variation margin

295,621

TOTAL ASSETS

220,013,443

Liabilities:

Payable for shares redeemed

451,779

Income distribution payable

1,163,159

Accrued expenses

67,868

TOTAL LIABILITIES

1,682,806

Net assets for 111,437,798 shares outstanding

218,330,637

Net Assets Consist of:

Paid-in capital

222,269,277

Net unrealized depreciation of investments and futures contracts

(4,656,333

)

Accumulated net realized gain on investments and futures contracts

545,673

Accumulated undistributed net investment income

172,020

TOTAL NET ASSETS

218,330,637

Net Asset Value, Offering Price and Redemption Proceeds Per Share

Institutional Shares:

$459,481 ÷ 234,625 shares outstanding

$ 1.96

Institutional Service Shares:

$217,871,156 ÷ 111,203,173 shares outstanding

$ 1.96

See Notes which are an integral part of the Financial Statements

Statement of Operations

SIX MONTHS ENDED MARCH 31, 2000 (UNAUDITED)

Investment Income:

Dividends

677,083

Interest

7,249,394

TOTAL INCOME

7,926,477

Expenses:

Investment adviser fee

648,658

Administrative personnel and services fee

80,664

Custodian fees

6,007

Transfer and dividend disbursing agent fees and expenses

13,922

Directors'/Trustees' fees

1,643

Auditing fees

4,200

Legal fees

933

Portfolio accounting fees

33,249

Distribution services fee--Institutional Service Shares

57,368

Shareholder services fee--Institutional Shares

Shareholder services fee--Institutional Service Shares

270,239

Share registration costs

32,517

Printing and postage

5,871

Insurance premiums

707

Miscellaneous

1,208

TOTAL EXPENSES

1,157,221

Waivers:

Waiver of investment adviser fee

(274,832

)

Waiver of distribution services fee--Institutional Service Shares

(11,474

)

Waiver of shareholder services fee--Institutional Shares

(35

)

TOTAL WAIVERS

(286,341

)

Net expenses

870,880

Net investment income

7,055,597

Realized and Unrealized Gain (Loss) on Investments and Futures Contracts:

Net realized gain on investments and futures contracts

684,013

Net change in unrealized depreciation of investments and futures contracts

(2,460,395

)

Net realized and unrealized loss on investments and futures contracts

(1,776,382

)

Change in net assets resulting from operations

5,279,215

See Notes which are an integral part of the Financial Statements

Statement of Changes in Net Assets

Six Months
Ended
(unaudited)
March 31,
2000

Year Ended
September 30,
1999

Increase (Decrease) in Net Assets

Operations:

Net investment income

7,055,597

4,746,007

Net realized gain on investments and futures contracts ($684,013 and $410,570, respectively, as computed for federal tax purposes)

684,013

370,056

Net change in unrealized depreciation of investments and futures contracts

(2,460,395

)

(2,195,938

)

CHANGE IN NET ASSETS RESULTING FROM OPERATIONS

5,279,215

2,920,125

Distributions to Shareholders:

Distributions from net investment income

Institutional Shares

(1,079

)

Institutional Service Shares

(6,965,998

)

(4,663,861

)

Distributions from net realized gain on investments and futures contracts

Institutional Service Shares

(508,396

)

CHANGE IN NET ASSETS RESULTING FROM DISTRIBUTIONS TO SHAREHOLDERS

(7,475,473

)

(4,663,861

)

Share Transactions:

Proceeds from sale of shares

191,900,275

325,135,965

Net asset value of shares issued to shareholders in payment of distributions declared

4,092,914

2,839,714

Cost of shares redeemed

(171,497,811

)

(130,300,447

)

CHANGE IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS

24,495,378

197,675,232

Change in net assets

22,299,120

195,931,496

Net Assets:

Beginning of period

196,031,517

100,021

End of period (including undistributed net investment income of $172,020 and $83,500, respectively)

218,330,637

196,031,517

See Notes which are an integral part of the Financial Statements

Financial Highlights--Institutional Shares

(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)

Period
Ended
(unaudited)
March 31,
2000

Net Asset Value, Beginning of Period

$ 1.96

Income From Investment Operations:

Net investment income

0.01

Net realized and unrealized gain (loss) on investments and futures contracts

TOTAL FROM INVESTMENT OPERATIONS

0.01

Less Distributions:

Distributions from net investment income

(0.01

)

Net Asset Value, End of Period

$ 1.96

Total Return²

0.74

Ratios to Average Net Assets:

Expenses

0.35

%⁴

Net investment income

7.70

%⁴

Expense waiver/reimbursement³

0.73

%⁴

Supplemental Data:

Net assets, end of period (000 omitted)

$459

Portfolio turnover

1 Reflects operations for the period from February 22, 2000 (date of initial public offering) to March 31, 2000.

2 Based on net asset value, which does not reflect the sales charge or contingent deferred sales charge, if applicable.

3 This voluntary expense decrease is reflected in both the expense and the net investment income ratios shown above.

4 Computed on an annualized basis.

See Notes which are an integral part of the Financial Statements

Financial Highlights--Institutional Service Shares

(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)

Six Months
Ended
(unaudited)
March 31,

Year Ended
September 30,

Period Ended
September 30,

2000

1999

1998

^{2, 3}

Net Asset Value, Beginning of Period

$ 1.98

$ 2.00

$ 1.99

Income From Investment Operations:

Net investment income

0.06

0.12

⁴

0.10

Net realized and unrealized gain (loss) on investments and futures contracts

(0.02

)

0.01

⁵

0.03

TOTAL FROM INVESTMENT OPERATIONS

0.04

0.13

Less Distributions:

Distributions from net investment income

(0.06

)

(0.15

)

(0.11

)

Distributions from net realized gain on investments and futures contracts

(0.00

)⁶

(0.01

)

TOTAL DISTRIBUTIONS

(0.06

)

(0.15

)

(0.12

)

Net Asset Value, End of Period

$ 1.96

$ 1.98

$ 2.00

Total Return⁷

2.48

5.32

6.75

Ratios to Average Net Assets:

Expenses

0.80

%⁸

0.77

0.56

%⁸

Net investment income

6.53

%⁸

6.36

5.18

%⁸

Expense waiver/reimbursement⁹

0.27

%⁸

0.49

6.83

%⁸

Supplemental Data:

Net assets, end of period (000 omitted)

$217,871

$196,032

$100

Portfolio turnover

501

1 For the year ended September 30, 1999, the fund was audited by Deloitte & Touche LLP. Each of the previous years was audited by others auditors.

2 Reflects operations for the period from October 3, 1997 (date of initial public investment) to September 30, 1998.

3 Per share amounts have been restated to reflect a share dividend as disclosed in the Notes.

4 Per share amount is based on the average number of shares outstanding.

5 The amount shown in this caption for a share outstanding does not correspond with the aggregate net realized and unrealized loss on investments and futures contracts for the year ended due to the timing of sales and repurchases of fund shares in relation to fluctuating market values of the investments of the fund.

6 Per share amount does not round to $(0.01).

7 Based on net asset value, which does not reflect the sales charge or contingent deferred sales charge, if applicable.

8 Computed on an annualized basis.

9 This voluntary expense decrease is reflected in both the expense and the net investment income ratios shown above.

See Notes which are an integral part of the Financial Statements

Notes to Financial Statements

MARCH 31, 2000 (UNAUDITED)

ORGANIZATION

Federated Total Return Series, Inc. (the "Corporation") is registered under the Investment Company Act of 1940, as amended (the "Act"), as an open-end, management investment company. The Corporation consists of four portfolios. The financial statements included herein are only those of Federated Ultrashort Bond Fund (the "Fund"), a diversified portfolio. The financial statements of the other portfolios are presented separately. The assets of each portfolio are segregated and a shareholder's interest is limited to the portfolio in which shares are held. The investment objective of the Fund is to provide total return consistent with current income.

Effective February 22, 2000, the Fund began offering Institutional Shares in addition to the Institutional Service Shares previously offered.

On August 20, 1998, the Board of Directors (the "Directors") declared a stock split. The stock split was effected in the form of a dividend payable in shares of the Fund on October 21, 1998. The dividend consisted of 5.08 shares for one (1) share in order to establish a $2.00 per share net asset value. Per share data prior to October 21, 1998 has been restated to give effect to the split.

SIGNIFICANT ACCOUNTING POLICIES

Investment Valuations

Repurchase Agreements

The Fund will only enter into repurchase agreements with banks and other recognized financial institutions, such as broker/dealers, which are deemed by the Fund's adviser to be creditworthy pursuant to the guidelines and/or standards reviewed or established by the Directors. Risks may arise from the potential inability of counterparties to honor the terms of the repurchase agreement. Accordingly, the Fund could receive less than the repurchase price on the sale of collateral securities. The Fund, along with other affiliated investment companies, may utilize a joint trading account for the purpose of entering into one or more repurchase agreements.

Investment Income, Expenses and Distributions

Interest income and expenses are accrued daily. Bond premium and discount, if applicable, are amortized as required by the Internal Revenue Code, as amended (the "Code"). Distributions to shareholders are recorded on the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at fair value. The Fund offers multiple classes of shares which differ in their respective distribution and service fees. All shareholders bear the common expenses of the Fund based on average daily net assets of each class, without distinction between share classes. Dividends are declared separately for each class. No class has preferential dividend rights; differences in per share dividend rates are generally due to differences in separate class expenses.

Federal Taxes

When-Issued and Delayed Delivery Transactions

The Fund may engage in when-issued or delayed delivery transactions. The Fund records when-issued securities on the trade date and maintains security positions such that sufficient liquid assets will be available to make payment for the securities purchased. Securities purchased on a when-issued or delayed delivery basis are marked-to-market daily and begin earning interest on the settlement date. Losses may occur on these transactions due to changes in market conditions or the failure of counterparties to perform under the contract.

Futures Contracts

The Fund purchases and sells financial futures contracts to manage cashflows, enhance yield, hedge against interest rate risk, and to potentially reduce transaction costs. Upon entering into a financial futures contract with a broker, the Fund is required to deposit in a segregated account a specified amount of cash or U.S. government securities. Futures contracts are valued daily and unrealized gains or losses are recorded in a "variation margin" account. Daily, the Fund receives from or pays to the broker a specified amount of cash based upon changes in the variation margin account. When a contract is closed, the Fund recognizes a realized gain or loss. For the period ended March 31, 2000, the Fund had realized gains of $514,222 on future contracts.

Futures contracts have market risks, including the risk that the change in the value of the contract may not correlate with changes in the value of the underlying securities.

At March 31, 2000, the Fund had outstanding futures contracts as set forth below:

Expiration Date	Contracts to Deliver	Position	Unrealized Appreciation (Depreciation)
June 2000	75 2-Year U.S. Treasury Note Futures	Short	$ (21,093	)

June 2000	105 5-Year U.S. Treasury Note Futures	Short	(119,766	)

June 2000	50 10-Year U.S. Treasury Note Futures	Short	(125,508	)

June 2001	60 90-Day Euro Dollar Futures	Short	123,000

December 2001	60 90-Day Euro Dollar Futures	Short	98,250

September 2002	100 90-Day Euro Dollar Futures	Short	22,500

Net Unrealized Depreciation on Futures Contracts			$(22,617	)

Restricted Securities

Use of Estimates

Other

Investment transactions are accounted for on a trade date basis.

CAPITAL STOCK

At March 31, 2000, par value shares ($0.001 per share) authorized were as follows:

Share Class Name		Number of Par Value Capital Stock Authorized
Institutional Shares		1,000,000,000
Institutional Service Shares		1,000,000,000
TOTAL		2,000,000,000

Transactions in capital stock were as follows:

Period Ended
March 31, 2000¹

Institutional Shares:

Shares

Amount

Shares sold

244,304

478,835

Shares issued to shareholders in payment of distributions declared

Shares redeemed

(9,694

)

(19,000

)

NET CHANGE RESULTING FROM INSTITUTIONAL SHARE TRANSACTIONS

234,625

459,865

Six Months Ended
March 31, 2000

Year Ended
September 30, 1999

Institutional Service Shares:

Shares

Amount

Shares

Amount

Shares sold

97,271,939

191,421,440

162,741,803

325,135,965

Shares issued to shareholders in payment of distributions declared

2,080,940

4,092,884

1,426,095

2,839,714

Shares redeemed

(87,122,425

)

(171,478,811

)

(65,245,181

)

(130,300,447

)

NET CHANGE RESULTING FROM INSTITUTIONAL SERVICE SHARE TRANSACTIONS

12,230,454

24,035,513

98,922,717

197,675,232

NET CHANGE RESULTING FROM SHARE TRANSACTIONS

12,465,079

24,495,378

98,922,717

197,675,232

1 For the period from February 22, 2000 (date of initial public investment) to March 31, 2000.

INVESTMENT ADVISER FEE AND OTHER TRANSACTIONS WITH AFFILIATES

Investment Adviser Fee

Federated Investment Management Company, the Fund's investment adviser (the "Adviser"), receives for its services an annual investment adviser fee equal to 0.60% of the Fund's average daily net assets. The Adviser may voluntarily choose to waive any portion of its fee. The Adviser can modify or terminate this voluntary waiver at any time at its sole discretion.

Administrative Fee

Distribution Services Fee

The Fund has adopted a Distribution Plan (the "Plan") pursuant to Rule 12b-1 under the Act. Under the terms of the Plan, the Fund will compensate Federated Securities Corp. ("FSC"), the principal distributor, from the net assets of the Fund to finance activities intended to result in the sale of the Fund's Institutional Service Shares. The Plan provides that the Fund may incur distribution expenses up to 0.25% of the average daily net assets of the Institutional Service Shares, annually, to compensate FSC. FSC may voluntarily choose to waive any portion of its fee. FSC can modify or terminate this voluntary waiver at any time at its sole discretion.

Shareholder Services Fee

Transfer and Dividend Disbursing Agent Fees and Expenses

Portfolio Accounting Fees

FServ maintains the Fund's accounting records for which it receives a fee. The fee is based on the level of the Fund's average daily net assets for the period, plus out-of-pocket expenses.

General

Certain of the Officers and Directors of the Corporation are Officers and Directors or Trustees of the above companies.

INVESTMENT TRANSACTIONS

Purchases and sales of investments, excluding short-term securities, for the period ended March 31, 2000, were as follows:

Purchases		$	58,528,151
Sales		$	21,972,447

Directors

JOHN F. DONAHUE

THOMAS G. BIGLEY

JOHN T. CONROY, JR.

NICHOLAS P. CONSTANTAKIS

JOHN F. CUNNINGHAM

J. CHRISTOPHER DONAHUE

LAWRENCE D. ELLIS, M.D.

PETER E. MADDEN

CHARLES F. MANSFIELD, JR.

JOHN E. MURRAY, JR., J.D., S.J.D.

MARJORIE P. SMUTS

JOHN S. WALSH

Officers

JOHN F. DONAHUE

Chairman

GLEN R. JOHNSON

President

WILLIAM D. DAWSON III

Chief Investment Officer

J. CHRISTOPHER DONAHUE

Executive Vice President

EDWARD C. GONZALES

Executive Vice President

JOHN W. MCGONIGLE

Executive Vice President and Secretary

RICHARD J. THOMAS

Treasurer

C. GRANT ANDERSON

Assistant Secretary

Federated
World-Class Investment Manager

SEMI-ANNUAL REPORT

Federated Ultrashort Bond Fund

SEMI-ANNUAL REPORT TO SHAREHOLDERS

MAY 31, 2000

Federated
Federated Ultrashort Bond Fund
Federated Investors Funds
5800 Corporate Drive
Pittsburgh, PA 15237-7000
1-800-341-7400
www.federatedinvestors.com
Federated Securities Corp., Distributor

Cusip 31428Q606
Cusip 31428Q879

G02603-01 (5/00)