Federated Total Return Series N-CSRS Certified semi-annual shareholder report (management investment company)

                                  United States
                       Securities and Exchange Commission
                             Washington, D.C. 20549

                                   Form N-CSR
   Certified Shareholder Report of Registered Management Investment Companies




                                    811-7115

                      (Investment Company Act File Number)


                       Federated Total Return Series, Inc.
         _______________________________________________________________

               (Exact Name of Registrant as Specified in Charter)



                            Federated Investors Funds
                              5800 Corporate Drive
                       Pittsburgh, Pennsylvania 15237-7000


                                 (412) 288-1900
                         (Registrant's Telephone Number)


                           John W. McGonigle, Esquire
                            Federated Investors Tower
                               1001 Liberty Avenue
                       Pittsburgh, Pennsylvania 15222-3779
                     (Name and Address of Agent for Service)
                (Notices should be sent to the Agent for Service)






                        Date of Fiscal Year End: 11/30/04


               Date of Reporting Period: Six months ended 5/31/04




Item 1.     Reports to Stockholders

Federated Investors
World-Class Investment Manager

Federated Total Return Bond Fund

Established 1993

A Portfolio of Federated Total Return Series, Inc.

11TH SEMI-ANNUAL SHAREHOLDER REPORT

May 31, 2004

Class A Shares
Class B Shares
Class C Shares
Class K Shares

FINANCIAL HIGHLIGHTS
FINANCIAL STATEMENTS
VOTING PROXIES ON FUND PORTFOLIO SECURITIES

Financial Highlights -- Class A Shares

(For a Share Outstanding Throughout Each Period)

	Six Months Ended (unaudited)		Year Ended November 30,				Period Ended
	5/31/2004		2003		2002		11/30/2001	1
Net Asset Value, Beginning of Period	$10.75		$10.62		$10.68		$10.61
Income From Investment Operations:
Net investment income	0.23		0.46		0.59		0.17
Net realized and unrealized gain (loss) on investments and foreign currency transactions	(0.16	)	0.14		(0.02	)	0.07
TOTAL FROM INVESTMENT OPERATIONS	0.07		0.60		0.57		0.24
Less Distributions:
Distributions from net investment income	(0.23	)	(0.47	)	(0.58	)	(0.17	)
Distributions from net realized gain on investments and foreign currency transactions	--		--		(0.05	)	--
TOTAL DISTRIBUTIONS	(0.23	)	(0.47	)	(0.63	)	(0.17	)
Net Asset Value, End of Period	$10.59		$10.75		$10.62		$10.68
Total Return2	0.65	%	5.69	%	5.58	%	2.29	%
Ratios to Average Net Assets:
Expenses	0.92	%3	0.87	%	0.85	%	0.85	%3
Net investment income	4.15	%3	4.20	%	5.69	%	5.82	%3
Expense waiver/reimbursement4	0.22	%3	0.21	%	0.23	%	0.23	%3
Supplemental Data:
Net assets, end of period (000 omitted)	$62,332		$94,713		$60,728		$7,302
Portfolio turnover	31	%	60	%	74	%	68	%

1 Reflects operations for the period from August 16, 2001 (date of initial public investment) to November 30, 2001.

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 -- Class B Shares

(For a Share Outstanding Throughout Each Period)

	Six Months Ended (unaudited)		Year Ended November 30,				Period Ended
	5/31/2004		2003		2002		11/30/2001	1
Net Asset Value, Beginning of Period	$10.75		$10.62		$10.68		$10.55
Income From Investment Operations:
Net investment income	0.20		0.41		0.54		0.18
Net realized and unrealized gain (loss) on investments and foreign currency transactions	(0.15	)	0.13		(0.02	)	0.13
TOTAL FROM INVESTMENT OPERATIONS	0.05		0.54		0.52		0.31
Less Distributions:
Distributions from net investment income	(0.21	)	(0.41	)	(0.53	)	(0.18	)
Distributions from net realized gain on investments and foreign currency transactions	--		--		(0.05	)	--
TOTAL DISTRIBUTIONS	(0.21	)	(0.41	)	(0.58	)	(0.18	)
Net Asset Value, End of Period	$10.59		$10.75		$10.62		$10.68
Total Return2	0.40	%	5.16	%	5.05	%	2.90	%
Ratios to Average Net Assets:
Expenses	1.42	%3	1.37	%	1.35	%	1.35	%3
Net investment income	3.68	%3	3.70	%	5.15	%	5.13	%3
Expense waiver/reimbursement4	0.22	%3	0.21	%	0.23	%	0.23	%3
Supplemental Data:
Net assets, end of period (000 omitted)	$63,059		$71,646		$52,396		$12,877
Portfolio turnover	31	%	60	%	74	%	68	%

1 Reflects operations for the period from August 3, 2001 (date of initial public investment) to November 30, 2001.

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 -- Class C Shares

(For a Share Outstanding Throughout Each Period)

	Six Months Ended (unaudited		Year Ended November 30,				Period Ended
	5/31/2004		2003		2002		11/30/2001	1
Net Asset Value, Beginning of Period	$10.75		$10.62		$10.68		$10.56
Income From Investment Operations:
Net investment income	0.20		0.41		0.54		0.18
Net realized and unrealized gain (loss) on investments and foreign currency transactions	(0.15	)	0.13		(0.02	)	0.12
TOTAL FROM INVESTMENT OPERATIONS	0.05		0.54		0.52		0.30
Less Distributions:
Distributions from net investment income	(0.21	)	(0.41	)	(0.53	)	(0.18	)
Distributions from net realized gain on investments and foreign currency transactions	--		--		(0.05	)	--
TOTAL DISTRIBUTIONS	(0.21	)	(0.41	)	(0.58	)	(0.18	)
Net Asset Value, End of Period	$10.59		$10.75		$10.62		$10.68
Total Return2	0.40	%	5.16	%	5.05	%	2.82	%
Ratios to Average Net Assets:
Expenses	1.39	%3	1.37	%	1.35	%	1.35	%3
Net investment income	3.73	%3	3.64	%	5.15	%	5.07	%3
Expense waiver/reimbursement4	0.22	%3	0.21	%	0.23	%	0.23	%3
Supplemental Data:
Net assets, end of period (000 omitted)	$57,965		$32,714		$14,287		$3,887
Portfolio turnover	31	%	60	%	74	%	68	%

1 Reflects operations for the period from August 2, 2001 (date of initial public investment) to November 30, 2001.

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 -- Class K Shares

(For a Share Outstanding Throughout Each Period)

	Six Months Ended (unaudited)		Period Ended
	5/31/2004		11/30/2003	1
Net Asset Value, Beginning of Period	$10.75		$10.76
Income From Investment Operations:
Net investment income	0.21		0.28
Net realized and unrealized loss on investments and foreign currency transactions	(0.15	)	(0.02	)
TOTAL FROM INVESTMENT OPERATIONS	0.06		0.26
Less Distributions:
Distributions from net investment income	(0.22	)	(0.27	)
Net Asset Value, End of Period	$10.59		$10.75
Total Return2	0.52	%	2.39	%
Ratios to Average Net Assets:
Expenses	1.11	%3	1.10	%3
Net investment income	4.04	%3	4.22	%3
Expense waiver/reimbursement4	0.22	%3	0.21	%3
Supplemental Data:
Net assets, end of period (000 omitted)	$26,672		$13,849
Portfolio turnover	31	%	60	%5

1 Reflects operations for the period from April 8, 2003 (start of performance) to November 30, 2003.

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.

5 Portfolio turnover is calculated at the fund level. Percentage indicated was calculated for the year ended November 30, 2003.

See Notes which are an integral part of the Financial Statements

Portfolio of Investments

May 31, 2004 (unaudited)

Principal Amount					Value
			CORPORATE BONDS--32.5%
			Basic Industry - Chemicals--0.1%
$	400,000		PPG Industries, Inc., Note, 6.750%, 8/15/2004	$	404,328
	300,000		Sherwin-Williams Co., Sr. Note, 6.850%, 2/1/2007		324,567
			TOTAL		728,895
			Basic Industry - Metals & Mining--0.9%
	2,000,000		BHP Finance (USA), Inc., Unsecd. Note, 6.690%, 3/1/2006		2,130,280
	1,759,000		Barrick Gold Corp., Deb., 7.500%, 5/1/2007		1,940,124
	1,000,000		Inco Ltd., 5.700%, 10/15/2015		991,280
	4,760,000		Noranda, Inc., Deb., 8.125%, 6/15/2004		4,773,756
	1,400,000		Thiokol Corp., Sr. Note, 6.625%, 3/1/2008		1,523,886
			TOTAL		11,359,326
			Basic Industry - Paper--0.9%
	830,000		International Paper Co., 5.500%, 1/15/2014		813,790
	2,250,000		Louisiana-Pacific Corp., 8.875%, 8/15/2010		2,638,125
	380,000		Westvaco Corp., 7.650%, 3/15/2027		429,696
	3,000,000		Westvaco Corp., Sr. Deb., 7.500%, 6/15/2027		3,356,550
	2,800,000		Weyerhaeuser Co., Deb., 7.375%, 3/15/2032		3,041,108
	700,000		Weyerhaeuser Co., Note, 5.500%, 3/15/2005		717,269
			TOTAL		10,996,538
			Capital Goods - Aerospace & Defense--0.3%
	1,400,000		Raytheon Co., Deb., 7.200%, 8/15/2027		1,504,874
	2,425,000	1	Raytheon Co., Note, 6.750%, 8/15/2007		2,631,925
			TOTAL		4,136,799
			Capital Goods -- Building Materials--0.2%
	2,476,000		Masco Corp., Note, 6.75%, 3/15/2006		2,641,323
	200,000		Vulcan Materials Co., 6.000%, 4/1/2009		211,804
			TOTAL		2,853,127
			Capital Goods - Construction Machinery--0.0%
	50,000		Caterpillar, Inc., Deb., 9.375%, 3/15/2021		67,260
	100,000		Ingersoll-Rand Co., Note, 6.510%, 12/1/2004		102,190
			TOTAL		169,450
Principal Amount					Value
			CORPORATE BONDS--continued
			Capital Goods - Diversified Manufacturing--0.4%
$	500,000	1	Honeywell International, Inc., Bond, 6.125%, 11/1/2011	$	532,825
	2,000,000	2	Hutchison Whampoa International Ltd., 7.450%, 11/24/2033		1,871,340
	1,600,000		Tyco International Group, Company Guarantee, 6.375%, 2/15/2006		1,682,096
	1,000,000	1	Tyco International Group, Note, 5.800%, 8/1/2006		1,046,320
			TOTAL		5,132,581
			Capital Goods - Environmental--0.5%
	1,000,000		Republic Services, Inc., 7.125%, 5/15/2009		1,114,460
	400,000		Waste Management Inc., Sr. Note, 7.000%, 10/1/2004		406,772
	1,300,000		Waste Management Inc., Sr. Note, 7.125%, 10/1/2007		1,431,586
	1,000,000	1	Waste Management, Inc., 7.375%, 8/1/2010		1,123,480
	2,048,000		Waste Management, Inc., Deb., 8.750%, 5/1/2018		2,289,377
			TOTAL		6,365,675
			Communications - Media & Cable--1.6%
	1,700,000		British Sky Broadcasting Group PLC, 8.200%, 7/15/2009		1,970,283
	4,200,000		British Sky Broadcasting Group PLC, Unsecd. Note, 7.300%, 10/15/2006		4,592,700
	3,100,000		Comcast Corp., 6.375%, 1/30/2006		3,268,237
	1,750,000		Continental Cablevision, Sr. Deb., 8.875%, 9/15/2005		1,890,035
	2,480,000		Continental Cablevision, Sr. Deb., 9.500%, 8/1/2013		2,799,697
	2,000,000		Cox Communications, Inc., Unsecd. Note, 5.500%, 10/1/2015		1,911,640
	3,150,000		Grupo Televisa S.A., Note, 8.000%, 9/13/2011		3,378,375
			TOTAL		19,810,967
			Communications - Media Non-Cable--0.8%
	3,000,000		Clear Channel Communications, Inc., 6.000%, 11/1/2006		3,175,380
	500,000		New York Times Co., Unsecd. Note, 7.625%, 3/15/2005		521,125
	300,000		News America Holdings, Inc., Company Guarantee, 8.000%, 10/17/2016		352,149
	200,000		News America Holdings, Inc., Sr. Note, 8.500%, 2/15/2005		208,878
	2,160,000		Reed Elsevier, Inc., Company Guarantee, 6.125%, 8/1/2006		2,299,298
	2,546,000		Univision Communications, Inc., 7.850%, 7/15/2011		2,926,143
			TOTAL		9,482,973
			Communications - Telecom Wireless--0.6%
	500,000		AT&T Wireless Services, Inc., 8.750%, 3/1/2031		610,755
	3,200,000	1	AT&T Wireless Services, Inc., Sr. Note, 7.350%, 3/1/2006		3,443,296
	2,834,000		Tritel PCS, Inc., Sr. Sub. Note, 10.375%, 1/15/2011		3,322,865
			TOTAL		7,376,916
Principal Amount					Value
			CORPORATE BONDS--continued
			Communications - Telecom Wirelines--2.2%
$	250,000		360 Communications, Sr. Note, 7.500%, 3/1/2006	$	269,305
	410,000		CenturyTel, Inc., 8.375%, 10/15/2010		469,261
	900,000		Citizens Communications Co., 9.000%, 8/15/2031		847,548
	2,100,000		Citizens Communications Co., Note, 8.500%, 5/15/2006		2,240,784
	100,000		Citizens Utilities Co., Deb., 7.600%, 6/1/2006		105,161
	1,000,000		Deutsche Telekom International Finance BV, 5.250%, 7/22/2013		975,520
	320,000		GTE North, Inc., Deb., 5.650%, 11/15/2008		334,957
	350,000		GTE South, Inc., Bond, 6.125%, 6/15/2007		373,184
	100,000		GTE South, Inc., Deb., 6.000%, 2/15/2008		106,470
	100,000		GTE South, Inc., Deb., Series MBIA, 6.125%, 6/15/2007		106,624
	500,000		New York Telephone Co., Deb., 6.000%, 4/15/2008		534,845
	200,000		Southwestern Bell Telephone Co., Deb., 7.200%, 10/15/2026		210,768
	5,000,000		Sprint Capital Corp., 7.125%, 1/30/2006		5,328,150
	3,000,000		Sprint Capital Corp., Company Guarantee, 8.750%, 3/15/2032		3,543,240
	8,410,000		Telecom de Puerto Rico, Note, 6.650%, 5/15/2006		8,940,250
	2,220,000		Telefonos de Mexico, Note, 4.500%, 11/19/2008		2,160,326
	500,000		Verizon Global Funding, Note, 7.250%, 12/1/2010		559,340
			TOTAL		27,105,733
			Consumer Cyclical - Automotive--3.6%
	1,850,000		DaimlerChrysler North America Holding Corp., 6.500%, 11/15/2013		1,874,087
	100,000		Ford Holdings, Inc., Deb., 9.300%, 3/1/2030		109,152
	200,000		Ford Motor Co., Deb., 6.500%, 8/1/2018		185,080
	200,000		Ford Motor Co., Deb., 8.900%, 1/15/2032		214,886
	3,475,000		Ford Motor Co., Unsecd. Note, 7.450%, 7/16/2031		3,315,463
	1,000,000		Ford Motor Credit Co., 7.000%, 10/1/2013		1,006,440
	250,000		Ford Motor Credit Co., Note, 6.200%, 1/23/2008		257,125
	12,000,000		Ford Motor Credit Co., Note, 6.500%, 1/25/2007		12,591,600
	200,000		Ford Motor Credit Co., Note, 7.375%, 10/28/2009		212,126
	400,000		Ford Motor Credit Co., Sr. Note, 5.800%, 1/12/2009		401,112
	500,000		Ford Motor Credit Co., Unsecd. Note, 6.750%, 5/15/2005		518,130
	200,000		Ford Motor Credit Co., Unsecd. Note, 7.375%, 2/1/2011		210,658
	1,100,000		General Motors Acceptance Corp., 4.500%, 7/15/2006		1,118,227
	5,000,000		General Motors Acceptance Corp., 6.125%, 8/28/2007		5,224,450
Principal Amount					Value
			CORPORATE BONDS--continued
			Consumer Cyclical - Automotive--continued
$	2,000,000		General Motors Acceptance Corp., 6.875%, 8/28/2012	$	2,024,000
	1,000,000		General Motors Acceptance Corp., 7.500%, 7/15/2005		1,051,830
	2,400,000		General Motors Acceptance Corp., 8.000%, 11/1/2031		2,425,560
	400,000		General Motors Acceptance Corp., Bond, 6.150%, 4/5/2007		418,568
	200,000		General Motors Acceptance Corp., Deb., 6.000%, 4/1/2011		194,670
	9,950,000		General Motors Acceptance Corp., Note, 6.750%, 1/15/2006		10,485,708
	100,000		General Motors Acceptance Corp., Note, 7.750%, 1/19/2010		108,302
	100,000		General Motors Acceptance Corp., Sr. Note, Series SMN, 5.750%, 10/15/2008		99,505
			TOTAL		44,046,679
			Consumer Cyclical - Entertainment--0.7%
	2,000,000		AOL Time Warner, Inc., Bond, 7.625%, 4/15/2031		2,161,360
	3,400,000		Carnival Corp., 3.750%, 11/15/2007		3,354,406
	230,000	2	International Speedway Corp., 4.200%, 4/15/2009		225,874
	1,170,000	2	International Speedway Corp., 5.400%, 4/15/2014		1,147,454
	1,250,000		Time Warner, Inc., Deb., 8.110%, 8/15/2006		1,371,612
			TOTAL		8,260,706
			Consumer Cyclical - Retailers--0.5%
	1,200,000		Neiman-Marcus Group, Inc., Sr. Deb., 7.125%, 6/1/2028		1,285,032
	650,000		Target Corp., 5.400%, 10/1/2008		683,072
	1,325,000		Wal-Mart Stores, Inc., Sr. Unsecd. Note, 6.875%, 8/10/2009		1,479,919
	3,000,000		Wal-Mart Stores, Inc., Unsecd. Note, 3.375%, 10/1/2008		2,917,590
			TOTAL		6,365,613
			Consumer Cyclical - Services--0.2%
	2,100,000		Boston University, 7.625%, 7/15/2097		2,378,187
			Consumer Non-Cyclical - Consumer Products--0.3%
	3,000,000		Alberto-Culver Co., Unsecd. Note, 8.250%, 11/1/2005		3,230,220
			Consumer Non-Cyclical - Food/Beverage--0.7%
	850,000		Diageo Finance BV, Unsecd. Note, 3.000%, 12/15/2006		845,325
	1,200,000		General Mills, Inc., Unsecd. Note, 2.625%, 10/24/2006		1,178,928
	3,500,000		Kellogg Co., 7.450%, 4/1/2031		4,022,760
	1,500,000		Kraft Foods, Inc., Note, 4.625%, 11/1/2006		1,539,810
	150,000		Ralston Purina Co., Deb., 7.875%, 6/15/2025		183,628
	200,000		Ralston Purina Co., Deb., 8.125%, 2/1/2023		247,666
			TOTAL		8,018,117
Principal Amount					Value
			CORPORATE BONDS--continued
			Consumer Non-Cyclical - Healthcare--0.1%
$	1,500,000		UnitedHealth Group, Inc., 7.500%, 11/15/2005	$	1,607,940
			Consumer Non-Cyclical - Pharmaceuticals--0.3%
	1,040,000		AstraZeneca PLC, 5.400%, 6/1/2014		1,056,453
	400,000		Lilly (Eli) & Co., Unsecd. Note, 6.570%, 1/1/2016		440,964
	50,000	1	Merck & Co., Inc., Note, 5.250%, 7/1/2006		52,323
	100,000		Merck & Co., Inc., Sr. Deb., 6.400%, 3/1/2028		105,068
	1,430,000		Wyeth, 6.500%, 2/1/2034		1,360,488
			TOTAL		3,015,296
			Consumer Non-Cyclical - Supermarkets--0.1%
	1,000,000	1	Kroger Co., Company Guarantee, 7.450%, 3/1/2008		1,117,570
			Consumer Non-Cyclical - Tobacco--0.2%
	885,000	1	Altria Group, Inc., 5.625%, 11/4/2008		870,167
	900,000		Philip Morris Cos., Inc., Note, 6.375%, 2/1/2006		922,437
			TOTAL		1,792,604
			Energy - Independent--0.8%
	750,000		Anadarko Petroleum Corp., Unsecd. Note, 7.000%, 10/15/2006		816,427
	2,300,000		Devon Financing Corp., 7.875%, 9/30/2031		2,646,403
	1,000,000		Norcen Energy Resources, Inc., Deb., 7.375%, 5/15/2006		1,083,330
	1,650,000		Pemex Project Funding Master, Company Guarantee, 9.125%, 10/13/2010		1,905,750
	300,000		Questar Corp., Series MTNB, 6.570%, 9/26/2011		313,812
	150,000		Questar Corp., Sr. Note, Series MTNA, 6.000%, 10/6/2008		158,044
	2,300,000	2	Ras Laffan Liquified Natural Gas, 3.437%, 9/15/2009		2,233,461
			TOTAL		9,157,227
			Energy - Integrated--1.7%
	100,000		BP PLC, Deb., 8.750%, 3/1/2032		134,645
	50,000		ChevronTexaco Corp., 5.700%, 12/1/2008		52,164
	4,150,000	1	Conoco, Inc., 7.250%, 10/15/2031		4,691,409
	5,670,000		Husky Oil Ltd., Company Guarantee, 8.900%, 8/15/2028		6,562,118
	4,418,000		Husky Oil Ltd., Deb., 7.550%, 11/15/2016		5,007,847
	4,000,000		Petro-Canada, Bond, 5.350%, 7/15/2033		3,465,320
	1,200,000	2	Statoil ASA, 5.125%, 4/30/2014		1,183,368
			TOTAL		21,096,871
Principal Amount					Value
			CORPORATE BONDS--continued
			Energy - Refining--0.4%
$	4,100,000		Valero Energy Corp., 7.500%, 4/15/2032	$	4,534,395
			Financial Institution - Banking--4.7%
	3,100,000		Astoria Financial Corp., Note, 5.750%, 10/15/2012		3,127,807
	1,100,000		Bank One Corp., Note, 6.000%, 8/1/2008		1,175,295
	500,000		Bank One Corp., Note, 7.600%, 5/1/2007		552,280
	875,000		Bank of America Corp., 3.875%, 1/15/2008		877,879
	400,000	1	Bank of America Corp., Sub. Note, 6.375%, 2/15/2008		431,248
	50,000		BankBoston N.A., Sub. Note, 6.500%, 12/19/2007		54,151
	366,000		Chase Manhattan Corp., 7.250%, 6/1/2007		401,820
	250,000		Chase Manhattan Corp., Sub. Deb., 7.875%, 7/15/2006		273,672
	775,000		Citicorp, Sub. Note, 7.000%, 7/1/2007		852,151
	50,000		Citicorp, Sub. Note, Series F, 6.375%, 11/15/2008		54,098
	50,000		Citigroup Global Markets Holdings, Inc., Note, 6.500%, 2/15/2008		54,333
	100,000		City National Bank, Sub. Note, 6.375%, 1/15/2008		106,054
	1,415,000		Corp Andina De Fomento, Bond, 7.375%, 1/18/2011		1,561,169
	150,000		Credit Suisse First Boston USA, Inc., Note, 6.125%, 11/15/2011		157,522
	1,000,000		Credit Suisse First Boston USA, Inc., Note, 6.500%, 1/15/2012		1,070,360
	4,000,000		Crestar Financial Corp., Sub. Note, 8.750%, 11/15/2004		4,131,680
	400,000		Donaldson, Lufkin and Jenrette, Inc., Note, 6.875%, 11/1/2005		423,104
	4,460,000		FirstBank Puerto Rico, Sub. Note, 7.625%, 12/20/2005		4,665,383
	970,000		Fleet National Bank, Series BKNT, 5.750%, 1/15/2009		1,027,036
	500,000		Household Finance Corp., 6.400%, 6/17/2008		540,165
	4,000,000	1	Household Finance Corp., 7.000%, 5/15/2012		4,435,680
	2,750,000		Household Finance Corp., Note, 6.750%, 5/15/2011		3,007,537
	500,000		Household Finance Corp., Note, 7.250%, 5/15/2006		539,980
	150,000		Household Finance Corp., Sr. Note, 5.875%, 9/25/2004		151,937
	500,000		Household Finance Corp., Unsecd. Note, 5.750%, 1/30/2007		528,910
	1,000,000		Hudson United Bancorp, 7.000%, 5/15/2012		1,083,260
	200,000		J.P. Morgan Chase & Co., Sub. Note, 6.000%, 2/15/2009		213,002
	100,000		JPM Capital Trust I, Company Guarantee, 7.540%, 1/15/2027		105,323
	275,000		Mellon Bank N.A., Pittsburgh, Sub. Note, 6.500%, 8/1/2005		285,453
	2,000,000		Northern Trust Corp., 4.600%, 2/1/2013		1,900,700
	320,000,000		OEK Oest. Kontrollbank, Gilt, 1.800%, 3/22/2010		3,062,907
	3,000,000		PNC Funding Corp., Sub. Note, 7.500%, 11/1/2009		3,405,930
Principal Amount					Value
			CORPORATE BONDS--continued
			Financial Institution - Banking--continued
$	1,449,029	2	Regional Diversified Funding, 9.250%, 3/15/2030	$	1,628,809
	300,000		Standard Federal Bank, N.A., Sub. Note, Series MTN, 7.750%, 7/17/2006		322,497
	300,000		Summit Capital Trust I, Bond, 8.400%, 3/15/2027		335,604
	500,000		SunTrust Banks, Inc., Sr. Note, 6.250%, 6/1/2008		541,570
	470,000	2	Swedbank, Sub., 7.500%, 11/29/2049		510,871
	100,000	1	U.S. Bancorp, Sub. Note, 8.000%, 7/2/2004		100,614
	500,000		U.S. Bank N.A., Sub. Note, 5.700%, 12/15/2008		528,975
	1,700,000		Union Planters Corp., 4.375%, 12/1/2010		1,658,112
	300,000		Wachovia Corp., Note, 7.550%, 8/18/2005		318,285
	395,000		Wachovia Corp., Sub. Note, 6.400%, 4/1/2008		427,038
	4,730,000		Washington Mutual Bank FA, Sub. Note, 6.875%, 6/15/2011		5,257,915
	4,000,000		Washington Mutual Finance Corp., Sr. Note, 8.250%, 6/15/2005		4,238,600
	150,000		Washington Mutual Inc., Sub. Note, 7.875%, 9/1/2004		152,187
	500,000		Wells Fargo Financial, Inc., 5.625%, 2/3/2009		529,660
			TOTAL		56,808,563
			Financial Institution - Brokerage--1.5%
	2,300,000		Amvescap PLC, Sr. Note, 6.600%, 5/15/2005		2,388,987
	100,000	1	Bear Stearns Cos., Inc., Note, 6.625%, 10/1/2004		101,615
	200,000		Bear Stearns Cos., Inc., Sr. Note, 7.000%, 3/1/2007		218,186
	500,000	1	Citigroup Global Markets Inc., Note, 6.875%, 6/15/2005		521,760
	2,645,000	2	FMR Corp., Bond, 7.570%, 6/15/2029		3,068,121
	750,000		Franklin Resources, Inc., 3.700%, 4/15/2008		737,333
	2,500,000		Goldman Sachs Group, Inc., 6.125%, 2/15/2033		2,359,825
	100,000		Goldman Sachs Group, Inc., Bond, 6.875%, 1/15/2011		110,013
	1,000,000		Goldman Sachs Group, Inc., Sr. Unsub., 6.650%, 5/15/2009		1,091,610
	1,290,000		Lehman Brothers Holdings, Inc., 7.500%, 9/1/2006		1,416,162
	530,000		Lehman Brothers Holdings, Inc., Note, 6.625%, 1/18/2012		576,942
	100,000		Lehman Brothers Holdings, Inc., Note, 6.625%, 2/5/2006		106,402
	400,000		Lehman Brothers Holdings, Inc., Note, 8.250%, 6/15/2007		451,228
	250,000		Lehman Brothers Holdings, Inc., Note, 8.500%, 8/1/2015		305,243
	325,000		Lehman Brothers, Inc., Sr. Sub. Note, 7.375%, 1/15/2007		355,667
	1,000,000		Merrill Lynch & Co., Inc., Sr. Unsub., 6.000%, 2/17/2009		1,064,200
	250,000		Morgan Stanley Group, Inc., 5.300%, 3/1/2013		245,823
	550,000		Morgan Stanley, Unsub., 6.100%, 4/15/2006		582,918
	2,250,000		Waddell & Reed Financial, Inc., 7.500%, 1/18/2006		2,409,593
			TOTAL		18,111,628
Principal Amount					Value
			CORPORATE BONDS--continued
			Financial Institution -- Finance Non-captive--1.0%
$	50,000		CIT Group, Inc., Note, 7.250%, 8/15/2005	$	52,887
	50,000		CIT Group, Inc., Note, 7.625%, 8/16/2005		53,084
	115,000		CIT Group, Inc., Sr. Note, 5.750%, 9/25/2007		121,665
	100,000	1	CIT Group, Inc., Sr. Note, 7.125%, 10/15/2004		102,067
	3,850,000	1	Capital One Financial Corp., Note, 7.125%, 8/1/2008		4,135,324
	50,000		General Electric Capital Corp., 5.350%, 3/30/2006		52,323
	250,000		General Electric Capital Corp., Note, Series MTNA, 4.625%, 9/15/2009		251,558
	2,500,000	1	General Electric Co., Note, 5.000%, 2/1/2013		2,454,800
	505,000		International Lease Finance Corp., Note, Series MTNN, 5.320%, 12/9/2007		526,801
	2,050,000		MBNA Corp., 7.500%, 3/15/2012		2,326,443
	1,500,000		SLM Corp., 5.625%, 4/10/2007		1,583,205
	743,000		Susa Partnership LP, Deb., 7.500%, 12/1/2027		843,974
			TOTAL		12,504,131
			Financial Institution - Insurance - Life--0.8%
	3,600,000		AXA-UAP, Sub. Note, 8.600%, 12/15/2030		4,397,256
	850,000		Delphi Financial Group, Inc., 9.310%, 3/25/2027		659,073
	360,000	2	Life Re Capital Trust I, Company Guarantee, 8.720%, 6/15/2027		374,954
	100,000		MetLife, Inc., Sr. Note, 6.125%, 12/1/2011		106,566
	3,000,000	2	Pacific LifeCorp., Bond, 6.600%, 9/15/2033		3,083,760
	400,000		Principal Financial Group, 6.125%, 10/15/2033		386,964
	150,000		Prudential Financial, Inc., 5.750%, 7/15/2033		137,826
	1,000,000	2	Reinsurance Group of America, Sr. Note, 7.250%, 4/1/2006		1,065,910
			TOTAL		10,212,309
			Financial Institution - Insurance -- P&C--1.0%
	400,000		Allstate Corp., Sr. Note, 7.875%, 5/1/2005		420,276
	1,600,000	2	Liberty Mutual Group, Unsecd. Note, 7.000%, 3/15/2034		1,546,768
	6,000,000	2	MBIA Global Funding LLC, 2.875%, 11/30/2006		5,931,960
	500,000	1	Marsh & McLennan Cos., Inc., 5.375%, 3/15/2007		523,905
	950,000		Marsh & McLennan Cos., Inc., Sr. Note, 7.125%, 6/15/2009		1,063,392
	1,000,000	2	Oil Insurance Ltd., Sub. Deb., 5.150%, 8/15/2033		1,002,060
	1,550,000		Travelers Property Casualty Corp., Sr. Note, 5.000%, 3/15/2013		1,499,362
	250,000		USF&G Corp., Company Guarantee, 8.470%, 1/10/2027		274,348
			TOTAL		12,262,071
Principal Amount					Value
			CORPORATE BONDS--continued
			Financial Institution -- REITS--0.2%
$	2,300,000		EOP Operating LP, 8.375%, 3/15/2006	$	2,509,599
			Foreign-Local-Government--0.5%
	3,900,000		Hydro Quebec, Sr. Deb., 6.300%, 5/11/2011		4,286,295
	900,000	1	Ontario, Province of, 4.375%, 2/15/2013		863,568
	1,000,000	1	Quebec, Province of, 5.500%, 4/11/2006		1,044,580
			TOTAL		6,194,443
			Sovereign--0.8%
	400,000,000		Inter-American Development Bank, 1.900%, 7/8/2009		3,853,115
	3,880,000		KFW-Kredit Wiederaufbau, 2.700%, 3/1/2007		3,815,126
	1,500,000	1	United Mexican States, 6.625%, 3/3/2015		1,507,500
			TOTAL		9,175,741
			State/Provincial--0.2%
	2,600,000		New South Wales, State of, Local Gov't. Guarantee, 6.500%, 5/1/2006		1,892,185
			Technology--1.1%
	2,000,000		Computer Sciences Corp., 7.375%, 6/15/2011		2,272,240
	4,000,000		Dell Computer Corp., Deb., 7.100%, 4/15/2028		4,441,320
	400,000		First Data Corp., MTN, Series MTND, 6.375%, 12/15/2007		434,820
	500,000		First Data Corp., Sr. Note, 5.625%, 11/1/2011		522,560
	500,000		Hewlett-Packard Co., Note, 5.750%, 12/15/2006		529,305
	500,000		IBM Corp., 4.875%, 10/1/2006		518,705
	1,150,000		IBM Corp., Deb., 8.375%, 11/1/2019		1,440,870
	300,000	1	IBM Corp., MTN, 5.400%, 10/1/2008		315,195
	350,000		IBM Corp., Note, 5.375%, 2/1/2009		366,772
	100,000		Texas Instruments, Inc., Note, 8.750%, 4/1/2007		113,196
	2,750,000		Unisys Corp., 8.125%, 6/1/2006		2,949,375
			TOTAL		13,904,358
			Transportation - Airlines--0.4%
	750,000		Delta Air Lines, Inc., Pass Thru Cert., 7.920%, 11/18/2010		506,250
	1,212,251		Northwest Airlines Corp., 7.935%, 4/1/2019		1,301,654
	669,516		Northwest Airlines Corp., Equip. Trust, 8.072%, 10/1/2019		720,567
	1,800,000	1	Southwest Airlines Co., 6.500%, 3/1/2012		1,907,262
			TOTAL		4,435,733
Principal Amount					Value
			CORPORATE BONDS--continued
			Transportation - Railroads--0.2%
$	1,850,000		Canadian Pacific RR, 7.125%, 10/15/2031	$	2,081,990
			Transportation - Services--0.4%
	3,500,000	2	FedEx Corp., Unsecd. Note, 2.650%, 4/1/2007		3,409,805
	650,000		Hertz Corp., 8.250%, 6/1/2005		682,955
	550,000		Hertz Corp., Note, 7.625%, 8/15/2007		589,551
			TOTAL		4,682,311
			Utility - Electric--1.6%
	800,000		Alabama Power Co., 2.800%, 12/1/2006		791,624
	2,500,000		Alabama Power Co., 5.700%, 2/15/2033		2,356,600
	3,000,000	1	American Electric Power Co., Inc., Note, 6.125%, 5/15/2006		3,168,870
	500,000		Baltimore Gas & Electric Co., Unsecd. Note, Series MTNG, 5.780%, 10/1/2008		533,220
	250,000		Enersis S.A., Note, 7.400%, 12/1/2016		227,500
	500,000		Entergy Louisiana, Inc., 1st Mtg. Bond, 6.500%, 3/1/2008		507,285
	939,483		Homer City Funding, Sr. Secd. Note, 8.734%, 10/1/2026		1,000,549
	250,000	2	Israel Electric Corp. Ltd., Sr. Note, 7.875%, 12/15/2026		259,783
	250,000		National Rural Utilities Cooperative Finance Corp., MTN, 5.750%, 12/1/2008		264,258
	2,050,000		Oncor, Inc., Deb., 7.000%, 9/1/2022		2,210,413
	3,000,000		PSEG Power LLC, Company Guarantee, 7.750%, 4/15/2011		3,407,100
	1,400,000		Pacific Gas & Electric Co., 6.050%, 3/1/2034		1,313,032
	300,000		Potomac Electric Power Co., 1st Mtg. Bond, 6.250%, 10/15/2007		324,864
	2,000,000		Public Service Electric & Gas Co., 4.000%, 11/1/2008		1,981,720
	400,000		West Penn Power Co., Note, Series A, 6.375%, 6/1/2004		401,936
	850,000		Wisconsin Power & Light Co., Note, 7.000%, 6/15/2007		926,636
			TOTAL		19,675,390
			Utility - Natural Gas Distributor--0.0%
	200,000		Michigan Consolidated Gas, 1st Mtg. Bond, Series C, 7.210%, 5/1/2007		220,124
			TOTAL CORPORATE BONDS (IDENTIFIED COST $389,266,941)		394,810,981
			ASSET-BACKED SECURITIES--0.2%
			Credit Card--0.1%
	1,500,000		Prime Credit Card Master Trust 2000-1, Class A, 6.700%, 10/15/2009		1,590,765
			Home Equity Loan--0.0%
	270,074	2	125 Home Loan Owner Trust 1998-1A, Class B1, 9.260%, 2/15/2029		273,998
Principal Amount					Value
			ASSET-BACKED SECURITIES--continued
			Manufactured Housing--0.0%
$	398,824		Green Tree Financial Corp. 1999-5, Class B1, 9.200%, 4/1/2031	$	26,047
			Rate Reduction Bond--0.0%
	368,197		California Infrastructure & Economic Development Bank Special Purpose Trust PG&E-1, Class A7, 6.420%, 9/25/2008		384,107
			Structured Product (ABS)--0.1%
	750,000		Citibank Credit Card Master Trust 1997-6, Class A, 8/15/2006		748,305
			TOTAL ASSET-BACKED SECURITIES (IDENTIFIED COST $3,200,691)		3,023,222
			GOVERNMENT AGENCIES--8.6%
	715,000		Federal Farm Credit System, 9.200%, 8/22/2005		775,561
	450,000		Federal Home Loan Bank System, Bond, Series 363, 4.500%, 11/15/2012		432,189
	100,000		Federal Home Loan Bank System, Bond, Series PJ08, 5.485%, 9/22/2009		105,672
	200,000		Federal Home Loan Bank System, Bond, Series KS08, 5.665%, 9/11/2008		212,826
	535,000		Federal Home Loan Bank System, Bond, Series NV09, 6.500%, 11/13/2009		587,869
	140,000		Federal Home Loan Bank System, Bond, Series EA10, 7.625%, 5/14/2010		162,235
	100,000		Federal Home Loan Bank System, Bond, Series VB09, 4.125%, 9/22/2009		100,833
	1,500,000		Federal Home Loan Bank System, Series HS07, 2.500%, 6/18/2007		1,456,860
	6,000,000	1	Federal Home Loan Mortgage Corp., Note, 2.125%, 11/15/2005		5,979,180
	600,000		Federal Home Loan Mortgage Corp., Note, 5.500%, 7/15/2006		631,794
	50,000		Federal Home Loan Mortgage Corp., Unsecd. Note, 6.500%, 8/24/2016		50,557
	200,000		Federal Home Loan Mortgage Corp., Unsecd. Note, 4.500%, 3/28/2012		203,324
	12,500,000		Federal National Mortgage Association, 3.250%, 1/15/2008		12,296,500
	600,000	1	Federal National Mortgage Association, 3.875%, 3/15/2005		609,792
	1,780,000		Federal National Mortgage Association, Bond, 6.625%, 11/15/2030		1,944,899
	26,000,000		Federal National Mortgage Association, Note, 2.150%, 7/28/2006		25,562,420
	1,500,000	1	Federal National Mortgage Association, Note, 3.250%, 11/15/2007		1,481,460
	1,000,000	1	Federal National Mortgage Association, Note, 4.250%, 7/15/2007		1,022,770
	1,250,000	1	Federal National Mortgage Association, Note, 4.375%, 10/15/2006		1,287,675
	600,000	1	Federal National Mortgage Association, Note, 5.000%, 1/15/2007		627,072
	8,000,000	1	Federal National Mortgage Association, Note, 5.500%, 2/15/2006		8,384,000
	38,000,000		Federal National Mortgage Association, Note, 2.500%, 8/11/2006		37,632,540
	1,900,000		Federal National Mortgage Association, Unsecd. Note, 6.500%, 8/15/2004		1,920,824
	70,000		Student Loan Marketing Association, Note, 7.300%, 8/1/2012		80,923
	1,000,000		Tennessee Valley Authority, Series C, 6.000%, 3/15/2013		1,063,590
			TOTAL GOVERNMENT AGENCIES (IDENTIFIED COST $105,243,584)		104,613,365
Principal Amount					Value
			GOVERNMENTS/AGENCIES--2.8%
			Sovereign--2.8%
$	4,600,000		Austria, Government of, Bond, 5.000%, 1/15/2008	$	5,954,747
	3,000,000		Canada, Government of, 5.000%, 9/1/2004		2,223,830
	205,000		Canada, Government of, Bond, 5.500%, 6/1/2009		159,896
	187,000		Canada, Government of, Deb., 6.500%, 6/1/2004		137,630
	4,700,000		Germany, Government of, Bond, 4.000%, 2/16/2007		5,907,964
	700,000		Germany, Government of, Bond, 5.000%, 1/4/2012		908,550
	3,450,000		Italy, Government of, 4.500%, 5/1/2009		4,384,311
	398,000,000		Italy, Government of, Bond, 1.800%, 2/23/2010		5,978,983
	4,500,000		Italy, Government of, Bond, 5.500%, 11/1/2010		3,803,175
	2,900,000		Norway, Government of, Foreign Gov't. Guarantee, 5.750%, 11/30/2004		439,195
	3,150,000		Sweden, Government of, Deb., 6.500%, 5/5/2008		466,026
	1,500,000		United Kingdom, Government of, Bond, 5.000%, 3/7/2008		2,740,850
	250,000		United Kingdom, Government of, Treasury Bill, 5.000%, 3/7/2012		453,920
			TOTAL GOVERNMENT/AGENCIES (IDENTIFIED COST $27,214,315)		33,559,077
			U.S. TREASURY--8.6%
			U.S. Treasury Bonds--7.0%
	36,900,000	1	United States Treasury Bond, 12.750%, 11/15/2010		42,406,218
	3,700,000	1	United States Treasury Bond, 8.125%, 5/15/2021		4,871,272
	1,300,000	1	United States Treasury Bond, 6.250%, 8/15/2023		1,432,028
	1,343,000	1	United States Treasury Bond, 6.000%, 2/15/2026		1,439,521
	300,000	1	United States Treasury Bond, 6.750%, 8/15/2026		350,907
	2,200,000	1	United States Treasury Bond, 6.500%, 11/15/2026		2,502,500
	4,935,000	1	United States Treasury Bond, 6.125%, 11/15/2027		5,379,940
	8,000,000	1	United States Treasury Bond, 5.500%, 8/15/2028		8,061,280
	2,215,000		United States Treasury Bond, 5.250%, 11/15/2028		2,158,584
	6,000,000	1	United States Treasury Bond, 6.250%, 5/15/2030		6,686,280
	10,465,000	1	United States Treasury Bond, 5.375%, 2/15/2031		10,509,162
			TOTAL		85,797,692
			U.S. Treasury Notes--1.6%
	19,000,000		United States Treasury Note, 4.750%, 5/15/2014		19,151,430
			TOTAL U.S. TREASURY (IDENTIFIED COST $104,821,800)		104,949,122
Principal Amount					Value
			MORTGAGE-BACKED SECURITIES--0.2%
			Federal Home Loan Mortgage Corp.--0.0%
$	643		Federal Home Loan Mortgage Corp., Pool G40281, 6.500%, 7/1/2004	$	644
			Federal National Mortgage Assoc.--0.0%
	78,831		Federal National Mortgage Association, Pool 390900, 7.500%, 6/1/2012		84,570
			Government National Mortgage Assoc.--0.2%
	147,140		Government National Mortgage Association, Pool 412615, 7.500%, 6/15/2026		157,991
	8,382		Government National Mortgage Association, Pool 432701, 8.000%, 6/15/2026		9,146
	32,352		Government National Mortgage Association, Pool 433329, 7.500%, 12/15/2026		34,698
	3,846		Government National Mortgage Association, Pool 433505, 7.500%, 4/15/2027		4,130
	8,453		Government National Mortgage Association, Pool 444274, 7.500%, 1/15/2027		9,066
	3,154		Government National Mortgage Association, Pool 446820, 8.000%, 8/15/2027		3,434
	749,856		Government National Mortgage Association, Pool 456873, 6.500%, 5/15/2028		781,261
	27,234		Government National Mortgage Association, Pool 460881, 7.000%, 7/15/2028		28,868
	42,284		Government National Mortgage Association, Pool 468225, 6.500%, 9/15/2028		44,055
	10,266		Government National Mortgage Association, Pool 571225, 6.500%, 10/15/2031		10,677
	716,464		Government National Mortgage Association, Pool 615490, 4.500%, 8/15/2033		671,907
	384,196		Government National Mortgage Association, Pool 780626, 7.000%, 8/15/2027		408,688
			TOTAL		2,163,921
			TOTAL MORTGAGE-BACKED SECURITIES (IDENTIFIED COST $2,180,556)		2,249,135
			COLLATERALIZED MORTGAGE OBLIGATIONS--0.9%
			Federal Home Loan Mortgage Corp.--0.0%
	659,825		Federal Home Loan Mortgage Corp., Series 1602, Class PH, 6.000%, 4/15/2023		684,423
			Federal National Mortgage Assoc.--0.0%
	84,838		Federal National Mortgage Association, Series 1988-16, Class B, 9.500%, 6/25/2018		92,373
	28,159		Federal National Mortgage Association, Series 1989-35, Class G, 9.500%, 7/25/2019		30,196
			TOTAL		122,569
			Non-Agency Mortgage--0.0%
	62,036	2	SMFC Trust Asset-Backed Certificates, Series 1997-A, Class 4, 3.59421%, 1/28/2025		47,554
			Structured Product (ABS)--0.9%
	10,676,829		Morgan Stanley Capital, Inc. 2004-T13, Class A1, 2.850%, 9/13/2045		10,454,217
			TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS (IDENTIFIED COST $11,545,494)		11,308,763
Shares or Principal Amount					Value
			PREFERRED STOCK--0.1%
			Financial Institution - Banking--0.1%
	21,000		Citigroup, Inc., Cumulative Pfd., Series F, 6.365%, Quarterly Dividend (IDENTIFIED COST $1,003,086)	$	1,086,750
			MUNICIPALS--0.1%
			Consumer Cyclical - Services--0.1%
$	725,000		Harvard University, Revenue Bonds, 8.125% Bonds, 4/15/2007 (IDENTIFIED COST $766,355)		818,561
			MUTUAL FUNDS--51.7%3
	1,912,585		Emerging Markets Fixed Income Core Fund		26,864,026
	16,947,340		High Yield Bond Portfolio		114,564,013
	38,763,159		Mortgage Core Portfolio		386,856,331
	26,351,033		Prime Value Obligations Fund, IS Shares		26,351,033
	74,631,058		Prime Value Obligations Fund, IS Shares (held as collateral for securities lending)		74,631,058
			TOTAL MUTUAL FUNDS (IDENTIFIED COST $629,153,641)		629,266,461
			TOTAL INVESTMENTS--105.7% (IDENTIFIED COST $1,274,396,463)4		1,285,685,437
			OTHER ASSETS AND LIABILITIES -- NET--(5.7)%		(69,830,233	)
			TOTAL NET ASSETS--100%	$	1,215,855,204

1 Certain principal amounts are temporarily on loan to unaffiliated broker/dealers.

2 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 May 31, 2004, these securities amounted to $28,865,850 which represents 2.4% of total net assets.

3 Affiliated company.

4 The cost of investments for federal tax purposes amounts to $1,274,396,463.

Note: The categories of investments are shown as a percentage of total net assets at May 31, 2004.

The following acronyms are used throughout this portfolio:

ABS	- --Asset-Backed Securities
MTN	- --Medium Term Note
REITS	- --Real Estate Investment Trust Securities

See Notes which are an integral part of the Financial Statements

Statement of Assets and Liabilities

May 31, 2004 (unaudited)

Assets:
Total investments in securities, at value including $629,266,461 of investments in affiliated issuers (Note 5) and $72,297,841 of securities loaned (identified cost $1,274,396,463)			$	1,285,685,437
Cash denominated in foreign currency (identified cost $1,449,893)				1,460,517
Income receivable				8,173,466
Receivable for investments sold				24,548,564
Receivable for shares sold				1,758,586
Prepaid expenses				186,202
TOTAL ASSETS				1,321,812,772
Liabilities:
Payable for investments purchased	$	24,382,257
Payable for shares redeemed		3,199,782
Payable to bank		916,119
Income distribution payable		2,563,552
Payable for collateral due to broker		74,631,058
Payable for distribution service fee (Note 5)		122,568
Payable for shareholder service fee (Note 5)		142,232
TOTAL LIABILITIES				105,957,568
Net assets for 114,788,354 shares outstanding			$	1,215,855,204
Net Assets Consist of:
Paid-in capital			$	1,207,675,252
Net unrealized appreciation of investments and translation of assets and liabilities in foreign currency				11,300,614
Accumulated net realized loss on investments and foreign currency transactions				(3,171,050	)
Undistributed net investment income				50,388
TOTAL NET ASSETS			$	1,215,855,204

Statement of Assets and Liabilities-continued

Net Asset Value, Offering Price and Redemption Proceeds Per Share
Institutional Shares:
Net asset value per share ($518,676,068 ÷ 48,969,025 shares outstanding)	$10.59
Offering price per share	$10.59
Redemption proceeds per share	$10.59
Institutional Service Shares:
Net asset value per share ($487,151,247 ÷ 45,987,181 shares outstanding)	$10.59
Offering price per share	$10.59
Redemption proceeds per share	$10.59
Class A Shares:
Net asset value per share ($62,332,366 ÷ 5,888,745 shares outstanding)	$10.59
Offering price per share (100/95.50 of $10.59)1	$11.09
Redemption proceeds per share	$10.59
Class B Shares:
Net asset value per share ($63,059,008 ÷ 5,953,362 shares outstanding)	$10.59
Offering price per share	$10.59
Redemption proceeds per share (94.50/100 of $10.59)1	$10.01
Class C Shares:
Net asset value per share ($57,964,511 ÷ 5,472,264 shares outstanding)	$10.59
Offering price per share (100/99.00 of $10.59)1	$10.70
Redemption proceeds per share (99.00/100 of $10.59)1	$10.48
Class K Shares:
Net asset value per share ($26,672,004 ÷ 2,517,777 shares outstanding)	$10.59
Offering price per share	$10.59
Redemption proceeds per share	$10.59

1 See "What Do Shares Cost?" in the Prospectus.

See Notes which are an integral part of the Financial Statements

Statement of Operations

Six Months Ended May 31, 2004 (unaudited)

Investment Income:
Dividends (including income received from affiliated issuers of $14,453,889) (Note 5)				$	14,453,889
Income allocated from partnership (Note 5)					1,095,688
Interest (including income on securities loaned of $39,557)					16,187,482
TOTAL INCOME					31,737,059
Expenses:
Investment adviser fee (Note 5)		$	2,487,269
Administrative personnel and services fee (Note 5)	��		496,832
Custodian fees			35,004
Transfer and dividend disbursing agent fees and expenses--Institutional Shares (Note 5)			112,201
Transfer and dividend disbursing agent fees and expenses-- Institutional Service Shares (Note 5)			110,565
Transfer and dividend disbursing agent fees and expenses-- Class A Shares (Note 5)			36,322
Transfer and dividend disbursing agent fees and expenses-- Class B Shares (Note 5)			33,544
Transfer and dividend disbursing agent fees and expenses-- Class C Shares (Note 5)			21,431
Transfer and dividend disbursing agent fees and expenses-- Class K Shares (Note 5)			31,336
Directors'/Trustees' fees			5,371
Auditing fees			7,914
Legal fees			3,167
Portfolio accounting fees (Note 5)			101,701
Distribution services fee--Institutional Service Shares (Note 5)			614,566
Distribution services fee--Class A Shares (Note 5)			85,484
Distribution services fee--Class B Shares (Note 5)			255,638
Distribution services fee--Class C Shares (Note 5)			218,269
Distribution services fee--Class K Shares (Note 5)			54,166
Shareholder services fee--Institutional Shares (Note 5)			669,441
Shareholder services fee--Institutional Service Shares (Note 5)			614,566
Shareholder services fee--Class A Shares (Note 5)			85,484
Shareholder services fee--Class B Shares (Note 5)			85,212
Shareholder services fee--Class C Shares (Note 5)			72,756
Share registration costs			91,099

Statement of Operations-continued

Expenses--continued:
Printing and postage				$	43,262
Insurance premiums					7,484
Taxes					47,295
Miscellaneous					3,472
EXPENSES BEFORE ALLOCATION					6,430,851
Expenses allocated from partnership (Note 5)					6,982
TOTAL EXPENSES					6,437,833
Waivers/Reimbursement (Note 5):
Waiver/reimbursement of investment adviser fee	$	(1,301,138	)
Waiver of administrative personnel and services fee		(23,008	)
Waiver of transfer and dividend disbursing agent fees and expenses--Institutional Shares		(25,589	)
Waiver of transfer and dividend disbursing agent fees and expenses--Institutional Service Shares		(31,020	)
Waiver of transfer and dividend disbursing agent fees and expenses--Class A Shares		(1,917	)
Waiver of transfer and dividend disbursing agent fees and expenses--Class B Shares		(1,905	)
Waiver of transfer and dividend disbursing agent fees and expenses--Class C Shares		(1,720	)
Waiver of transfer and dividend disbursing agent fees and expenses--Class K Shares		(723	)
Waiver of distribution services fee--Institutional Service Shares		(491,653	)
Waiver of shareholder services fee--Institutional Shares		(669,441	)
TOTAL WAIVERS AND REIMBURSEMENT					(2,548,114	)
Net expenses							$	3,889,719
Net investment income								27,847,340
Realized and Unrealized Gain (Loss) on Investments and Foreign Currency Transactions:
Net realized gain on investments and foreign currency transactions (including realized loss of $582,770 on sales of investments in affiliated issuers (Note 5))								1,331,131
Net realized gain allocated from partnership								744,205
Net change in unrealized appreciation of investments and translation of assets and liabilities in foreign currency								(21,052,098	)
Net realized and unrealized loss on investments and foreign currency transactions								(18,976,762	)
Change in net assets resulting from operations							$	8,870,578

See Notes which are an integral part of the Financial Statements

Statement of Changes in Net Assets

		Six Months Ended (unaudited) 5/31/2004			Year Ended 11/30/2003
Increase (Decrease) in Net Assets
Operations:
Net investment income	$	27,847,340		$	46,022,783
Net realized gain (loss) on investments including allocation from partnership and foreign currency transactions		2,075,336			4,748,084
Net change in unrealized appreciation/depreciation of investments and translation of assets and liabilities in foreign currency		(21,052,098	)		1,816,471
CHANGE IN NET ASSETS RESULTING FROM OPERATIONS		8,870,578			52,587,338
Distributions to Shareholders:
Distributions from net investment income
Institutional Shares		(12,835,647	)		(23,708,449	)
Institutional Service Shares		(11,051,730	)		(16,057,470	)
Class A Shares		(1,459,335	)		(3,308,045	)
Class B Shares		(1,291,040	)		(2,584,971	)
Class C Shares		(1,107,044	)		(959,987	)
Class K Shares		(439,614	)		(63,122	)
CHANGE IN NET ASSETS RESULTING FROM DISTRIBUTIONS TO SHAREHOLDERS		(28,184,410	)		(46,682,044	)
Share Transactions:
Proceeds from sale of shares		271,863,366			623,887,408
Proceeds from shares issued in connection with the tax-free transfer of assets from United Trust Bank		--			6,840,796
Proceeds from shares issued in connection with the tax-free transfer of assets from United Trust Bank		--			64,075,774
Proceeds from shares issued in connection with the tax-free transfer of assets from Founders		--			1,277,385
Proceeds from shares issued in connection with the taxable transfer of assets from Founders		--			629,074
Proceeds from shares issued in connection with the tax-free transfer of assets from Riggs Bank		--			16,177,030
Proceeds from shares issued in connection with the tax-free transfer of assets from Federated Managed Income Portfolio		79,497,244
Net asset value of shares issued to shareholders in payment of distributions declared		13,145,154			22,372,713
Cost of shares redeemed		(294,223,200	)		(399,564,861	)
CHANGE IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS		70,282,564			335,695,319
Change in net assets		50,968,732			341,600,613
Net Assets:
Beginning of period		1,164,886,472			823,285,859
End of period (including undistributed net investment income of $50,388 and $387,458, respectively)	$	1,215,855,204		$	1,164,886,472

See Notes which are an integral part of the Financial Statements

Notes to Financial Statements

May 31, 2004 (unaudited)

1. 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 six classes of shares: Institutional Shares, Institutional Service Shares, Class A Shares, Class B Shares, Class C Shares and Class K Shares. Effective April 8, 2003, the Fund added Class K Shares. The investment objective of the Fund is to provide total return.

On June 23, 2003, the Fund received a tax-free transfer of assets from the United Trust Bank Fixed-Income Fund A Common Trust and United Trust Bank EB Bond Fund, as follows:

	Shares of the Fund Issued in Relation to Tax-Free Transfer of Assets	Tax-Free Transfer of Common Trust Fund Net Assets Received	Unrealized Appreciation Included in Tax-Free Net Assets Received1
Institutional Shares	620,199	$  6,840,796	$  429,746
Institutional Service Shares	5,809,227	$64,075,774	$3,972,294

Net Assets of Fund Prior to Combination	Net Assets of Common Trust Funds Immediately Prior to Combination	Net Assets of Fund Immediately After Combination
$1,063,163,494	$70,916,570	$1,134,080,064

1 Unrealized appreciation is included in the Tax-Free Transfer of Common Trust Fund Net Assets Received amount shown above.

On July 21, 2003, the Fund received a tax-free transfer of assets from the Founders Government Securities-Personal Trust Common Trust Fund and a taxable transfer of assets from the Founders Government Securities-Retirement Trust Common Trust Fund, as follows:

Institutional Service Shares of the Fund Issued in Relation to Tax-Free Transfer of Assets	Institutional Service Shares of the Fund Issued in Relation to Taxable Transfer of Assets	Tax-Free Transfer of Common Trust Fund Net Assets Received	Taxable Transfer of Common Trust Fund Net Assets Received	Unrealized Appreciation Included in Tax-Free Net Assets Received1
118,058	58,140	$1,277,385	$629,074	$5,743

Net Assets of Fund Prior to Combination	Net Assets of Common Trust Funds Immediately Prior to Combination	Net Assets of Fund Immediately After Combination
$1,139,809,010	$1,906,459	$1,141,715,469

1 Unrealized appreciation is included in the Tax-Free Transfer of Common Trust Fund Net Assets Received amount shown above.

On September 26, 2003, the Fund received a tax-free transfer of assets from the Riggs Bond Fund, as follows:

Institutional Service Shares of the Fund Issued in Relation to Tax-Free Transfer of Assets	Tax-Free Transfer of Riggs Bond Fund Net Assets Received	Unrealized Appreciation Included in Tax-Free Net Assets Received1
1,495,104	$16,177,030	$537,833

Net Assets of Fund Prior to Combination	Net Assets of Riggs Bond Fund Immediately Prior to Combination	Net Assets of Fund Immediately After Combination
$1,126,454,883	$16,177,030	$1,142,631,913

1 Unrealized appreciation is included in the Tax-Free Transfer of Riggs Bond Fund Net Assets Received amount shown above.

On December 18, 2003, the Fund received a tax-free transfer of assets from the Federated Managed Income Portfolio, as follows:

	Shares of the Fund Issued in Relation to Tax-Free Transfer of Assets	Tax-Free Transfer of Federated Managed Income Portfolio Net Assets Received	Unrealized Appreciation Included in Tax-Free Net Assets Received1
Institutional Service Shares	4,911,638	$50,694,544	$2,097,055
Class C Shares	2,698,226	$28,802,700	$ 298,971

Net Assets of Fund Prior to Combination	Net Assets of Federated Managed Income Portfolio Immediately Prior to Combination	Net Assets of Fund Immediately After Combination
$1,167,525,735	$79,497,244	$1,247,022,979

1 Unrealized appreciation is included in the Tax-Free Transfer of Federated Managed Income Portfolio Net Assets Received amount shown above.

2. 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 (GAAP) in the United States of America.

Investment Valuation

Domestic and foreign equity securities are valued at the last sale price or official closing price reported in the market in which they are primarily traded (either a national securities exchange or the over-the-counter market), if available. If unavailable, the security is generally valued at the mean between the last closing bid and asked prices. 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 (NYSE). Therefore, foreign securities are valued at the latest closing price on the exchange on which they are traded immediately prior to the closing of the NYSE. Foreign securities quoted in foreign currencies are translated in U.S. dollars at the foreign exchange rate in effect at 4:00 p.m., Eastern time, on the day the value of the foreign security is determined. Fixed-income, listed corporate bonds, 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. Securities for which no quotations are readily available or whose values have been affected by a significant event occurring between the close of their primary markets and the closing of the NYSE are valued at fair value as determined in accordance with procedures established by and under general supervision of the Board of Directors (the "Directors").

Pursuant to an Exemptive Order issued by the Securities and Exchange Commission (SEC), the Fund may invest in Federated Core Trust, (Core Trust) which is managed by Federated Investment Management Company, the Fund's adviser. Core Trust is an open-end management company, registered under the Investment Company Act of 1940, available only to registered investment companies and other institutional investors. The investment objective of Federated Mortgage Core Portfolio, a series of Core Trust, is to seek total return by investing in a diversified portfolio of mortgage-backed fixed income securities. Federated receives no advisory or administrative fees on behalf of Core Trust. Income distributions from Core Trust are declared daily and paid monthly, and are recorded by the Fund as dividend income. Capital gain distributions, if any, from Core Trust are declared and paid annually, and are recorded by the Fund as capital gains. Additional information regarding Federated Mortgage Core Portfolio is available upon request.

The Fund may also invest in Federated Core Trust II, (the "Core Trust II"), pursuant to a separate Exemptive Order issued by the SEC. Core Trust II is independently managed by Federated Investment Counseling. Core Trust II is a limited partnership established under the laws of the State of Delaware, on November 13, 2000, registered under the Act, and offered only to registered investment companies and other accredited investors. The investment objective of Emerging Markets Fixed Income Core Fund (EMCORE), a series of Core Trust II, is to achieve total return on assets. Federated receives no advisory or administrative fees on behalf of the Core Trust II. The Fund records daily its proportionate share of income, expenses, unrealized gains and losses and realized gains and losses from EMCORE. Additional information regarding EMCORE is available upon request.

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 the 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 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. 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 transfer and dividend disbursing agent, 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.

Premium and Discount Amortization/Paydown Gains and Losses

All premiums and discounts on fixed income securities are amortized/accreted for financial statement purposes. Gains and losses realized on principal payment of mortgage-backed securities (paydown gains and losses) are classified as part of investment income.

Federal Taxes

It is the Fund's policy to comply with the Subchapter M provision of the Internal Revenue Code (the "Code") and to distribute to shareholders each year substantially all of its income. Accordingly, no provision for federal tax is necessary.

Other Taxes

As an open-end management investment company incorporated in the state of Maryland but domiciled in Pennsylvania, the Fund is subject to the Pennsylvania Franchise Tax. This franchise tax is assessed annually on the value of the Fund, as represented by average net assets for the tax 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.

Foreign Exchange Contracts

The Fund may enter into foreign currency commitments for the delayed delivery of securities or foreign currency exchange transactions. The Fund may enter into foreign currency contract transactions to protect assets against adverse changes in foreign currency exchange rates or exchange control regulations. Purchased contracts are used to acquire exposure to foreign currencies; whereas, contracts to sell are used to hedge the Fund's securities against currency fluctuations. Risks may arise upon entering these transactions from the potential inability of counterparties to meet the terms of their commitments and from unanticipated movements in security prices or foreign exchange rates. The foreign currency transactions are adjusted by the daily exchange rate of the underlying currency and any gains or losses are recorded for financial statement purposes as unrealized until the settlement date. At May 31, 2004, the Fund had no outstanding foreign currency commitments.

Foreign Currency Translation

The accounting records of the Fund are maintained in U.S. dollars. All assets and liabilities denominated in foreign currencies (FCs) are translated into U.S. dollars based on the rate of exchange of such currencies against U.S. dollars on the date of valuation. Purchases and sales of securities, income and expenses are translated at the rate of exchange quoted on the respective date that such transactions are recorded. The Fund does not isolate that portion of the results of operations resulting from changes in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities held. Such fluctuations are included with the net realized and unrealized gain or loss from investments.

Reported net realized foreign exchange gains or losses arise from sales of portfolio securities, sales and maturities of short-term securities, sales of FCs, currency gains or losses realized between the trade and settlement dates on securities transactions, the difference between the amounts of dividends, interest and foreign withholding taxes recorded on the Fund's books, and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains and losses arise from changes in the value of assets and liabilities other than investments in securities at fiscal year end, resulting from changes in the exchange rate.

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 in accordance with procedures established by and under general supervision of the Directors.

Securities Lending

The Fund participates in a securities lending program providing for the lending of corporate bonds, equity and government securities to qualified brokers. Collateral for securities loaned is invested in an affiliated money market fund. Collateral is maintained at a minimum level of 102% of the market value of investments loaned, plus interest, if applicable. Earnings on collateral are allocated between the securities lending agent, as a fee for its services under the program, and the Fund, according to agreed-upon rates.

As of May 31, 2004, securities subject to this type of arrangement and related collateral were as follows:

Market Value of Securities Loaned	Market Value of Collateral
$72,297,841	$74,631,058

Use of Estimates

The preparation of financial statements in conformity with GAAP 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.

3. CAPITAL STOCK

At May 31, 2004, 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 Services Shares	1,000,000,000
Class A Shares	1,000,000,000
Class B Shares	1,000,000,000
Class C Shares	1,000,000,000
Class K Shares	1,000,000,000
TOTAL	6,000,000,000

Transactions in capital stock were as follows:

	Six Months Ended 5/31/2004					Year Ended 11/30/2003
Institutional Shares:	Shares			Amount		Shares			Amount
Shares sold	12,456,922		$	135,177,329		22,560,102		$	244,230,985
Shares issued in connection with the tax-free transfer of assets from United Trust Bank Employee Bond Fund	--			--		620,199			6,840,796
Shares issued to shareholders in payment of distributions declared	294,287			3,181,029		568,477			6,145,109
Shares redeemed	(11,151,531	)		(120,516,310	)	(18,056,517	)		(194,521,811	)
NET CHANGE RESULTING FROM INSTITUTIONAL SHARE TRANSACTIONS	1,599,678		$	17,842,048		5,692,261		$	62,695,079
	Six Months Ended 5/31/2004					Year Ended 11/30/2003
Institutional Service Shares:	Shares			Amount		Shares			Amount
Shares sold	7,986,884		$	88,897,800		21,411,036		$	231,051,666
Shares issued in connection with the tax-free transfer of assets from United Trust Bank Fixed Income Fund A	--			--		5,809,227			64,075,774
Shares issued in connection with the tax-free transfer of assets from Founders Government Securities-Personal Trust	--			--		118,058			1,277,385
Shares issued in connection with the taxable Transfer of assets from Founders Government Securities-Retirement Trust	--			--		58,140			629,074
Shares issued in connection with the tax-free transfer of assets from Riggs Bond Fund	--			--		1,495,104			16,177,030
Shares issued in connection with the tax-free transfer of assets from Federated Managed Income Portfolio	4,911,638			50,694,544		--			--
Shares issued to shareholders in payment of distributions declared	618,497			6,684,765		1,006,402			10,877,698
Shares redeemed	(8,690,786	)		(93,960,312	)	(12,576,112	)		(135,877,771	)
NET CHANGE RESULTING FROM INSTITUTIONAL SERVICE SHARE TRANSACTIONS	4,826,233		$	52,316,797		17,321,855		$	188,210,856

	Six Months Ended 5/31/2004					Year Ended 11/30/2003
Class A Shares:	Shares			Amount		Shares			Amount
Shares sold	1,768,369		$	19,038,148		5,974,269		$	64,560,078
Shares issued to shareholders in payment of distributions declared	108,433			1,172,297		258,708			2,795,022
Shares redeemed	(4,797,042	)		(52,045,596	)	(3,141,326	)		(33,901,279	)
NET CHANGE RESULTING FROM CLASS A SHARE TRANSACTIONS	(2,920,240	)	$	(31,835,151	)	3,091,651		$	33,453,821
	Six Months Ended 5/31/2004					Year Ended 11/30/2003
Class B Shares:	Shares			Amount		Shares			Amount
Shares sold	422,549		$	4,574,307		3,468,482		$	37,554,448
Shares issued to shareholders in payment of distributions declared	86,883			939,350		171,604			1,854,378
Shares redeemed	(1,219,885	)		(13,187,430	)	(1,909,180	)		(20,514,400	)
NET CHANGE RESULTING FROM CLASS B SHARE TRANSACTIONS	(710,453	)	$	(7,673,773	)	1,730,906		$	18,894,426
	Six Months Ended 5/31/2004					Year Ended 11/30/2003
Class C Shares:	Shares			Amount		Shares			Amount
Shares sold	725,269		$	8,215,288		2,975,647		$	32,309,877
Shares issued in connection with the tax-free transfer of assets from Federated Managed Income Portfolio	2,698,226			28,802,700		--			--
Shares issued to shareholders in payment of distributions declared	67,527			729,892		58,988			637,389
Shares redeemed	(1,061,434	)		(11,483,755	)	(1,336,995	)		(14,362,203	)
NET CHANGE RESULTING FROM CLASS C SHARE TRANSACTIONS	2,429,588		$	26,264,125		1,697,640		$	18,585,063
	Six Months Ended 5/31/2004					Period Ended 11/30/20031
Class K Shares:	Shares			Amount		Shares			Amount
Shares sold	1,470,656		$	15,960,494		1,318,135		$	14,180,354
Shares issued to shareholders in payment of distributions declared	40,559			437,821		5,871			63,117
Shares redeemed	(281,365	)		(3,029,797	)	(36,079	)		(387,397	)
NET CHANGE RESULTING FROM CLASS K SHARE TRANSACTIONS	1,229,850		$	13,368,518		1,287,927		$	13,856,074
NET CHANGE RESULTING FROM SHARE TRANSACTIONS	6,454,656		$	70,282,564		30,822,240		$	335,695,319

1 Reflects operations for the period from April 8, 2003 (start of performance) to November 30, 2003.

4. FEDERAL TAX INFORMATION

At May 31, 2004, the cost of investments for federal tax purposes was $1,274,396,463. The net unrealized appreciation of investments for federal tax purposes was $11,288,974. This consists of net unrealized appreciation from investments for those securities having an excess of value over cost of $33,233,809 and net unrealized depreciation from investments for those securities having an excess of cost over value of $21,944,835.

At November 30, 2003, the Fund had a capital loss carryforward of $4,064,021 which will reduce the Fund's taxable income arising from future net realized gains on investments, if any, to the extent permitted by the Code and thus will reduce the amount of 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 2010.

5. 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.

Pursuant to an Exemptive Order issued by the Securities and Exchange Commission, the Fund may invest in other funds which are managed by the Adviser or an affiliate of the Adviser. The Adviser has agreed to reimburse certain investment adviser fees as a result of these transactions. Income distributions earned from investments in these funds are recorded as income in the accompanying financial statements and are listed below.

Federated Mortgage Core Portfolio	$	9,415,568
High-Yield Bond Portfolio	$	4,776,422
Emerging Markets Fixed Income Core Fund	$	1,095,688
Prime Value Obligations Fund	$	261,899

Administrative Fee

Federated Administrative Services (FAS), under the Administrative Services Agreement (Agreement), provides the Fund with administrative personnel and services. The fee paid to FAS is based on the average aggregate daily net assets of all Federated funds as specified below:

Maximum Administrative Fee	Average Aggregate Daily Net Assets of the Federated Funds
0.150%	on the first $5 billion
0.125%	on the next $5 billion
0.100%	on the next $10 billion
0.075%	on assets in excess of $20 billion

The administrative fee received during any fiscal year shall be at least $150,000 per portfolio and $40,000 per each additional class of Shares. FAS may voluntarily choose to waive any portion of its fee. FAS can modify or terminate this voluntary waiver at any time at its sole discretion.

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 daily net assets of the Institutional Service Shares, Class A Shares, Class B Shares, Class C Shares and Class K Shares to finance activities intended to result in the sale of these Shares. The Plan provides that the Fund may incur distribution expenses according to the following schedule annually, to compensate FSC.

Share Class Name	Percentage of Average Daily Net Assets of Class
Institutional Service Shares	0.25%
Class A Shares	0.25%
Class B Shares	0.75%
Class C Shares	0.75%
Class K Shares	0.50%

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.

Sales Charges

For the six months ended May 31, 2004, FSC retained $10,999 in sales charges from the sale of Class A Shares. FSC also retained $941 of contingent deferred sales charges relating to redemptions of Class C Shares. See "What Do Shares Cost?" in the Prospectus.

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 the average daily net assets of the Fund's Institutional Shares, Institutional Service Shares, Class A Shares, Class B Shares and Class C Shares 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

Federated Services Company (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. 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.

Portfolio Accounting Fees

Prior to January 1, 2004, FServ maintained the Fund's accounting records for which it received a fee. The fee was based on the level of the Fund's average daily net assets for the period, plus out-of-pocket expenses. The fee paid to FServ during the reporting period was $16,705, after voluntary waiver, if applicable.

General

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

6. INVESTMENT TRANSACTIONS

Purchases and sales of investments, excluding long-term U.S. government securities and short-term obligations (and in-kind contributions), for the six months ended May 31, 2004, were as follows:

Purchases	$	265,091,223
Sales	$	379,304,652

7. LEGAL PROCEEDINGS

In October 2003, Federated Investors, Inc. and various subsidiaries thereof (including the advisers and distributor for various investment companies, collectively, "Federated"), along with various investment companies sponsored by Federated ("Funds") were named as defendants in several class action lawsuits now pending in the United States District Court for the District of Maryland seeking damages of unspecified amounts. The lawsuits were purportedly filed on behalf of people who purchased, owned and/or redeemed shares of Federated-sponsored mutual funds during specified periods beginning November 1, 1998. The suits are generally similar in alleging that Federated engaged in illegal and improper trading practices including market timing and late trading in concert with certain institutional traders, which allegedly caused financial injury to the mutual fund shareholders. The Board of the Funds has retained the law firm of Dickstein Shapiro Morin & Oshinsky LLP to represent the Funds in these lawsuits. Federated and the Funds, and their respective counsel, are reviewing the allegations and will respond appropriately. Additional lawsuits based upon similar allegations have been filed, and others may be filed in the future. Although Federated does not believe that these lawsuits will have a material adverse effect on the Funds, there can be no assurance that these suits, the ongoing adverse publicity and/or other developments resulting from related regulatory investigations will not result in increased Fund redemptions, reduced sales of Fund shares, or other adverse consequences for the Funds.

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.

VOTING PROXIES ON FUND PORTFOLIO SECURITIES

A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to securities held in the Fund's portfolio is available, without charge and upon request, by calling 1-800-341-7400. This information is also available from the EDGAR database on the SEC's Internet site at http://www.sec.gov.

IMPORTANT NOTICE ABOUT FUND DOCUMENT DELIVERY

In an effort to reduce costs and avoid duplicate mailings, the Fund(s) intend to deliver a single copy of certain documents to each household in which more than one shareholder of the Fund(s) resides (so-called "householding"), as permitted by applicable rules. The Fund's "householding" program covers its/their Prospectus and Statement of Additional Information, and supplements to each, as well as Semi-Annual and Annual Shareholder Reports and any Proxies or information statements. Shareholders must give their written consent to participate in the "householding" program. The Fund is also permitted to treat a shareholder as having given consent ("implied consent") if (i) shareholders with the same last name, or believed to be members of the same family, reside at the same street address or receive mail at the same post office box, (ii) the Fund gives notice of its intent to "household" at least sixty (60) days before it begins "householding" and (iii) none of the shareholders in the household have notified the Fund(s) or their agent of the desire to "opt out" of "householding." Shareholders who have granted written consent, or have been deemed to have granted implied consent, can revoke that consent and opt out of "householding" at any time: shareholders who purchased shares through an intermediary should contact their representative; other shareholders may call the Fund at 1-800-341-7400.

Federated Investors
World-Class Investment Manager

Federated Total Return Bond Fund
Federated Investors Funds
5800 Corporate Drive
Pittsburgh, PA 15237-7000
www.federatedinvestors.com

Contact us at 1-800-341-7400 or
www.federatedinvestors.com/contact

Federated Securities Corp., Distributor

Cusip 31428Q820
Cusip 31428Q812
Cusip 31428Q796
Cusip 31428Q770

Federated is a registered mark of Federated Investors, Inc. 2004 ©Federated Investors, Inc.

28555 (7/04)

Federated Investors
World-Class Investment Manager

Federated Total Return Bond Fund

A Portfolio of Federated Total Return Series, Inc.

11TH SEMI-ANNUAL SHAREHOLDER REPORT

May 31, 2004

Institutional Shares
Institutional Service Shares

FINANCIAL HIGHLIGHTS

FINANCIAL STATEMENTS

VOTING PROXIES ON FUND PORTFOLIO SECURITIES

NOT FDIC INSURED * MAY LOSE VALUE * NO BANK GUARANTEE

Financial Highlights -- Institutional Shares

(For a Share Outstanding Throughout Each Period)

		Six Months Ended (unaudited)			Year Ended November 30,							Period Ended		Year Ended September 30,
		5/31/2004			2003		2002		2001			11/30/2000	1	2000		1999
Net Asset Value, Beginning of Period		$10.75			$10.62		$10.68		$10.25			$10.16		$10.18		$10.90
Income From Investment Operations:
Net investment income		0.26			0.52		0.64		0.67			0.12		0.69		0.63
Net realized and unrealized gain (loss) on investments and foreign currency transactions		(0.16	)		0.13		(0.02	)	0.43			0.09		(0.01	)	(0.70	)
TOTAL FROM INVESTMENT OPERATIONS		0.10			0.65		0.62		1.10			0.21		0.68		(0.07	)
Less Distributions:
Distributions from net investment income		(0.26	)		(0.52	)	(0.63	)	(0.67	)		(0.12	)	(0.69	)	(0.63	)
Distributions from net realized gain on investments and foreign currency transactions		--			--		(0.05	)	--			--		(0.01	)	(0.02	)
TOTAL DISTRIBUTIONS		(0.26	)		(0.52	)	(0.68	)	(0.67	)		(0.12	)	(0.70	)	(0.65	)
Net Asset Value, End of Period		$10.59			$10.75		$10.62		$10.68			$10.25		$10.16		$10.18
Total Return2		0.90	%		6.21	%	6.10	%	10.99	%	��	2.03	%	6.96	%	(0.63	)%
Ratios to Average Net Assets:
Expenses		0.35	%3		0.35	%	0.35	%	0.35	%		0.35	%3	0.35	%	0.35	%
Net investment income		4.74	%3		4.73	%	6.10	%	6.32	%		6.89	%3	6.85	%	6.10	%
Expense waiver/reimbursement4		0.46	%3		0.46	%	0.48	%	0.48	%		0.50	%3	0.48	%	0.62	%
Supplemental Data:
Net assets, end of period (000 omitted)	$518,676			$509,354		$442,668		$347,242		$233,016			$203,864		$145,428
Portfolio turnover		31	%		60	%	74	%	68	%		9	%	49	%	97	%

1 The Fund changed its fiscal year end from September 30 to November 30.

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)		Year Ended November 30,									Period Ended			Year Ended September 30,
		5/31/2004			2003			2002			2001		11/30/2000	1		2000			1999
Net Asset Value, Beginning of Period		$10.75			$10.62			$10.68			$10.25		$10.16			$10.18			$10.90
Income From Investment Operations:
Net investment income		0.24			0.48			0.61			0.64		0.11			0.66			0.60
Net realized and unrealized gain (loss) on investments and foreign currency transactions		(0.16	)		0.14			(0.02	)		0.43		0.09			(0.01	)		(0.70	)
TOTAL FROM INVESTMENT OPERATIONS		0.08			0.62			0.59			1.07		0.20			0.65			(0.10	)
Less Distributions:
Distributions from net investment income		(0.24	)		(0.49	)		(0.60	)		(0.64	)	(0.11	)		(0.66	)		(0.60	)
Distributions from net realized gain on investments and foreign currency transactions		--			--			(0.05	)		--		--			(0.01	)		(0.02	)
TOTAL DISTRIBUTIONS		(0.24	)		(0.49	)		(0.65	)		(0.64	)	(0.11	)		(0.67	)		(0.62	)
Net Asset Value, End of Period		$10.59			$10.75			$10.62			$10.68		$10.25			$10.16			$10.18
Total Return2		0.75	%		5.90	%		5.79	%		10.66	%	1.98	%		6.64	%		(0.93	)%
Ratios to Average Net Assets:
Expenses		0.65	%3		0.65	%		0.66	%		0.65	%	0.65	%3		0.65	%		0.65	%
Net investment income		4.45	%3		4.41	%		5.80	%		5.99	%	6.58	%3		6.64	%		5.80	%
Expense waiver/reimbursement4		0.42	%3		0.42	%		0.43	%		0.43	%	0.45	%3		0.43	%		0.57	%
Supplemental Data:
Net assets, end of period (000 omitted)	$487,151			$442,611			$253,207			$190,476		$82,682			$75,687			$21,376
Portfolio turnover		31	%		60	%		74	%		68	%	9	%		49	%		97	%

1 The Fund changed its fiscal year end from September 30 to November 30.

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

Portfolio of Investments

May 31, 2004 (unaudited)

Principal Amount					Value
			CORPORATE BONDS--32.5%
			Basic Industry - Chemicals--0.1%
$	400,000		PPG Industries, Inc., Note, 6.750%, 8/15/2004	$	404,328
	300,000		Sherwin-Williams Co., Sr. Note, 6.850%, 2/1/2007		324,567
			TOTAL		728,895
			Basic Industry - Metals & Mining--0.9%
	2,000,000		BHP Finance (USA), Inc., Unsecd. Note, 6.690%, 3/1/2006		2,130,280
	1,759,000		Barrick Gold Corp., Deb., 7.500%, 5/1/2007		1,940,124
	1,000,000		Inco Ltd., 5.700%, 10/15/2015		991,280
	4,760,000		Noranda, Inc., Deb., 8.125%, 6/15/2004		4,773,756
	1,400,000		Thiokol Corp., Sr. Note, 6.625%, 3/1/2008		1,523,886
			TOTAL		11,359,326
			Basic Industry - Paper--0.9%
	830,000		International Paper Co., 5.500%, 1/15/2014		813,790
	2,250,000		Louisiana-Pacific Corp., 8.875%, 8/15/2010		2,638,125
	380,000		Westvaco Corp., 7.650%, 3/15/2027		429,696
	3,000,000		Westvaco Corp., Sr. Deb., 7.500%, 6/15/2027		3,356,550
	2,800,000		Weyerhaeuser Co., Deb., 7.375%, 3/15/2032		3,041,108
	700,000		Weyerhaeuser Co., Note, 5.500%, 3/15/2005		717,269
			TOTAL		10,996,538
			Capital Goods - Aerospace & Defense--0.3%
	1,400,000		Raytheon Co., Deb., 7.200%, 8/15/2027		1,504,874
	2,425,000	1	Raytheon Co., Note, 6.750%, 8/15/2007		2,631,925
			TOTAL		4,136,799
			Capital Goods -- Building Materials--0.2%
	2,476,000		Masco Corp., Note, 6.75%, 3/15/2006		2,641,323
	200,000		Vulcan Materials Co., 6.000%, 4/1/2009		211,804
			TOTAL		2,853,127
			Capital Goods - Construction Machinery--0.0%
	50,000		Caterpillar, Inc., Deb., 9.375%, 3/15/2021		67,260
	100,000		Ingersoll-Rand Co., Note, 6.510%, 12/1/2004		102,190
			TOTAL		169,450
Principal Amount					Value
			CORPORATE BONDS--continued
			Capital Goods - Diversified Manufacturing--0.4%
$	500,000	1	Honeywell International, Inc., Bond, 6.125%, 11/1/2011	$	532,825
	2,000,000	2	Hutchison Whampoa International Ltd., 7.450%, 11/24/2033		1,871,340
	1,600,000		Tyco International Group, Company Guarantee, 6.375%, 2/15/2006		1,682,096
	1,000,000	1	Tyco International Group, Note, 5.800%, 8/1/2006		1,046,320
			TOTAL		5,132,581
			Capital Goods - Environmental--0.5%
	1,000,000		Republic Services, Inc., 7.125%, 5/15/2009		1,114,460
	400,000		Waste Management Inc., Sr. Note, 7.000%, 10/1/2004		406,772
	1,300,000		Waste Management Inc., Sr. Note, 7.125%, 10/1/2007		1,431,586
	1,000,000	1	Waste Management, Inc., 7.375%, 8/1/2010		1,123,480
	2,048,000		Waste Management, Inc., Deb., 8.750%, 5/1/2018		2,289,377
			TOTAL		6,365,675
			Communications - Media & Cable--1.6%
	1,700,000		British Sky Broadcasting Group PLC, 8.200%, 7/15/2009		1,970,283
	4,200,000		British Sky Broadcasting Group PLC, Unsecd. Note, 7.300%, 10/15/2006		4,592,700
	3,100,000		Comcast Corp., 6.375%, 1/30/2006		3,268,237
	1,750,000		Continental Cablevision, Sr. Deb., 8.875%, 9/15/2005		1,890,035
	2,480,000		Continental Cablevision, Sr. Deb., 9.500%, 8/1/2013		2,799,697
	2,000,000		Cox Communications, Inc., Unsecd. Note, 5.500%, 10/1/2015		1,911,640
	3,150,000		Grupo Televisa S.A., Note, 8.000%, 9/13/2011		3,378,375
			TOTAL		19,810,967
			Communications - Media Non-Cable--0.8%
	3,000,000		Clear Channel Communications, Inc., 6.000%, 11/1/2006		3,175,380
	500,000		New York Times Co., Unsecd. Note, 7.625%, 3/15/2005		521,125
	300,000		News America Holdings, Inc., Company Guarantee, 8.000%, 10/17/2016		352,149
	200,000		News America Holdings, Inc., Sr. Note, 8.500%, 2/15/2005		208,878
	2,160,000		Reed Elsevier, Inc., Company Guarantee, 6.125%, 8/1/2006		2,299,298
	2,546,000		Univision Communications, Inc., 7.850%, 7/15/2011		2,926,143
			TOTAL		9,482,973
			Communications - Telecom Wireless--0.6%
	500,000		AT&T Wireless Services, Inc., 8.750%, 3/1/2031		610,755
	3,200,000	1	AT&T Wireless Services, Inc., Sr. Note, 7.350%, 3/1/2006		3,443,296
	2,834,000		Tritel PCS, Inc., Sr. Sub. Note, 10.375%, 1/15/2011		3,322,865
			TOTAL		7,376,916
Principal Amount					Value
			CORPORATE BONDS--continued
			Communications - Telecom Wirelines--2.2%
$	250,000		360 Communications, Sr. Note, 7.500%, 3/1/2006	$	269,305
	410,000		CenturyTel, Inc., 8.375%, 10/15/2010		469,261
	900,000		Citizens Communications Co., 9.000%, 8/15/2031		847,548
	2,100,000		Citizens Communications Co., Note, 8.500%, 5/15/2006		2,240,784
	100,000		Citizens Utilities Co., Deb., 7.600%, 6/1/2006		105,161
	1,000,000		Deutsche Telekom International Finance BV, 5.250%, 7/22/2013		975,520
	320,000		GTE North, Inc., Deb., 5.650%, 11/15/2008		334,957
	350,000		GTE South, Inc., Bond, 6.125%, 6/15/2007		373,184
	100,000		GTE South, Inc., Deb., 6.000%, 2/15/2008		106,470
	100,000		GTE South, Inc., Deb., Series MBIA, 6.125%, 6/15/2007		106,624
	500,000		New York Telephone Co., Deb., 6.000%, 4/15/2008		534,845
	200,000		Southwestern Bell Telephone Co., Deb., 7.200%, 10/15/2026		210,768
	5,000,000		Sprint Capital Corp., 7.125%, 1/30/2006		5,328,150
	3,000,000		Sprint Capital Corp., Company Guarantee, 8.750%, 3/15/2032		3,543,240
	8,410,000		Telecom de Puerto Rico, Note, 6.650%, 5/15/2006		8,940,250
	2,220,000		Telefonos de Mexico, Note, 4.500%, 11/19/2008		2,160,326
	500,000		Verizon Global Funding, Note, 7.250%, 12/1/2010		559,340
			TOTAL		27,105,733
			Consumer Cyclical - Automotive--3.6%
	1,850,000		DaimlerChrysler North America Holding Corp., 6.500%, 11/15/2013		1,874,087
	100,000		Ford Holdings, Inc., Deb., 9.300%, 3/1/2030		109,152
	200,000		Ford Motor Co., Deb., 6.500%, 8/1/2018		185,080
	200,000		Ford Motor Co., Deb., 8.900%, 1/15/2032		214,886
	3,475,000		Ford Motor Co., Unsecd. Note, 7.450%, 7/16/2031		3,315,463
	1,000,000		Ford Motor Credit Co., 7.000%, 10/1/2013		1,006,440
	250,000		Ford Motor Credit Co., Note, 6.200%, 1/23/2008		257,125
	12,000,000		Ford Motor Credit Co., Note, 6.500%, 1/25/2007		12,591,600
	200,000		Ford Motor Credit Co., Note, 7.375%, 10/28/2009		212,126
	400,000		Ford Motor Credit Co., Sr. Note, 5.800%, 1/12/2009		401,112
	500,000		Ford Motor Credit Co., Unsecd. Note, 6.750%, 5/15/2005		518,130
	200,000		Ford Motor Credit Co., Unsecd. Note, 7.375%, 2/1/2011		210,658
	1,100,000		General Motors Acceptance Corp., 4.500%, 7/15/2006		1,118,227
	5,000,000		General Motors Acceptance Corp., 6.125%, 8/28/2007		5,224,450
Principal Amount					Value
			CORPORATE BONDS--continued
			Consumer Cyclical - Automotive--continued
$	2,000,000		General Motors Acceptance Corp., 6.875%, 8/28/2012	$	2,024,000
	1,000,000		General Motors Acceptance Corp., 7.500%, 7/15/2005		1,051,830
	2,400,000		General Motors Acceptance Corp., 8.000%, 11/1/2031		2,425,560
	400,000		General Motors Acceptance Corp., Bond, 6.150%, 4/5/2007		418,568
	200,000		General Motors Acceptance Corp., Deb., 6.000%, 4/1/2011		194,670
	9,950,000		General Motors Acceptance Corp., Note, 6.750%, 1/15/2006		10,485,708
	100,000		General Motors Acceptance Corp., Note, 7.750%, 1/19/2010		108,302
	100,000		General Motors Acceptance Corp., Sr. Note, Series SMN, 5.750%, 10/15/2008		99,505
			TOTAL		44,046,679
			Consumer Cyclical - Entertainment--0.7%
	2,000,000		AOL Time Warner, Inc., Bond, 7.625%, 4/15/2031		2,161,360
	3,400,000		Carnival Corp., 3.750%, 11/15/2007		3,354,406
	230,000	2	International Speedway Corp., 4.200%, 4/15/2009		225,874
	1,170,000	2	International Speedway Corp., 5.400%, 4/15/2014		1,147,454
	1,250,000		Time Warner, Inc., Deb., 8.110%, 8/15/2006		1,371,612
			TOTAL		8,260,706
			Consumer Cyclical - Retailers--0.5%
	1,200,000		Neiman-Marcus Group, Inc., Sr. Deb., 7.125%, 6/1/2028		1,285,032
	650,000		Target Corp., 5.400%, 10/1/2008		683,072
	1,325,000		Wal-Mart Stores, Inc., Sr. Unsecd. Note, 6.875%, 8/10/2009		1,479,919
	3,000,000		Wal-Mart Stores, Inc., Unsecd. Note, 3.375%, 10/1/2008		2,917,590
			TOTAL		6,365,613
			Consumer Cyclical - Services--0.2%
	2,100,000		Boston University, 7.625%, 7/15/2097		2,378,187
			Consumer Non-Cyclical - Consumer Products--0.3%
	3,000,000		Alberto-Culver Co., Unsecd. Note, 8.250%, 11/1/2005		3,230,220
			Consumer Non-Cyclical - Food/Beverage--0.7%
	850,000		Diageo Finance BV, Unsecd. Note, 3.000%, 12/15/2006		845,325
	1,200,000		General Mills, Inc., Unsecd. Note, 2.625%, 10/24/2006		1,178,928
	3,500,000		Kellogg Co., 7.450%, 4/1/2031		4,022,760
	1,500,000		Kraft Foods, Inc., Note, 4.625%, 11/1/2006		1,539,810
	150,000		Ralston Purina Co., Deb., 7.875%, 6/15/2025		183,628
	200,000		Ralston Purina Co., Deb., 8.125%, 2/1/2023		247,666
			TOTAL		8,018,117
Principal Amount					Value
			CORPORATE BONDS--continued
			Consumer Non-Cyclical - Healthcare--0.1%
$	1,500,000		UnitedHealth Group, Inc., 7.500%, 11/15/2005	$	1,607,940
			Consumer Non-Cyclical - Pharmaceuticals--0.3%
	1,040,000		AstraZeneca PLC, 5.400%, 6/1/2014		1,056,453
	400,000		Lilly (Eli) & Co., Unsecd. Note, 6.570%, 1/1/2016		440,964
	50,000	1	Merck & Co., Inc., Note, 5.250%, 7/1/2006		52,323
	100,000		Merck & Co., Inc., Sr. Deb., 6.400%, 3/1/2028		105,068
	1,430,000		Wyeth, 6.500%, 2/1/2034		1,360,488
			TOTAL		3,015,296
			Consumer Non-Cyclical - Supermarkets--0.1%
	1,000,000	1	Kroger Co., Company Guarantee, 7.450%, 3/1/2008		1,117,570
			Consumer Non-Cyclical - Tobacco--0.2%
	885,000	1	Altria Group, Inc., 5.625%, 11/4/2008		870,167
	900,000		Philip Morris Cos., Inc., Note, 6.375%, 2/1/2006		922,437
			TOTAL		1,792,604
			Energy - Independent--0.8%
	750,000		Anadarko Petroleum Corp., Unsecd. Note, 7.000%, 10/15/2006		816,427
	2,300,000		Devon Financing Corp., 7.875%, 9/30/2031		2,646,403
	1,000,000		Norcen Energy Resources, Inc., Deb., 7.375%, 5/15/2006		1,083,330
	1,650,000		Pemex Project Funding Master, Company Guarantee, 9.125%, 10/13/2010		1,905,750
	300,000		Questar Corp., Series MTNB, 6.570%, 9/26/2011		313,812
	150,000		Questar Corp., Sr. Note, Series MTNA, 6.000%, 10/6/2008		158,044
	2,300,000	2	Ras Laffan Liquified Natural Gas, 3.437%, 9/15/2009		2,233,461
			TOTAL		9,157,227
			Energy - Integrated--1.7%
	100,000		BP PLC, Deb., 8.750%, 3/1/2032		134,645
	50,000		ChevronTexaco Corp., 5.700%, 12/1/2008		52,164
	4,150,000	1	Conoco, Inc., 7.250%, 10/15/2031		4,691,409
	5,670,000		Husky Oil Ltd., Company Guarantee, 8.900%, 8/15/2028		6,562,118
	4,418,000		Husky Oil Ltd., Deb., 7.550%, 11/15/2016		5,007,847
	4,000,000		Petro-Canada, Bond, 5.350%, 7/15/2033		3,465,320
	1,200,000	2	Statoil ASA, 5.125%, 4/30/2014		1,183,368
			TOTAL		21,096,871
Principal Amount					Value
			CORPORATE BONDS--continued
			Energy - Refining--0.4%
$	4,100,000		Valero Energy Corp., 7.500%, 4/15/2032	$	4,534,395
			Financial Institution - Banking--4.7%
	3,100,000		Astoria Financial Corp., Note, 5.750%, 10/15/2012		3,127,807
	1,100,000		Bank One Corp., Note, 6.000%, 8/1/2008		1,175,295
	500,000		Bank One Corp., Note, 7.600%, 5/1/2007		552,280
	875,000		Bank of America Corp., 3.875%, 1/15/2008		877,879
	400,000	1	Bank of America Corp., Sub. Note, 6.375%, 2/15/2008		431,248
	50,000		BankBoston N.A., Sub. Note, 6.500%, 12/19/2007		54,151
	366,000		Chase Manhattan Corp., 7.250%, 6/1/2007		401,820
	250,000		Chase Manhattan Corp., Sub. Deb., 7.875%, 7/15/2006		273,672
	775,000		Citicorp, Sub. Note, 7.000%, 7/1/2007		852,151
	50,000		Citicorp, Sub. Note, Series F, 6.375%, 11/15/2008		54,098
	50,000		Citigroup Global Markets Holdings, Inc., Note, 6.500%, 2/15/2008		54,333
	100,000		City National Bank, Sub. Note, 6.375%, 1/15/2008		106,054
	1,415,000		Corp Andina De Fomento, Bond, 7.375%, 1/18/2011		1,561,169
	150,000		Credit Suisse First Boston USA, Inc., Note, 6.125%, 11/15/2011		157,522
	1,000,000		Credit Suisse First Boston USA, Inc., Note, 6.500%, 1/15/2012		1,070,360
	4,000,000		Crestar Financial Corp., Sub. Note, 8.750%, 11/15/2004		4,131,680
	400,000		Donaldson, Lufkin and Jenrette, Inc., Note, 6.875%, 11/1/2005		423,104
	4,460,000		FirstBank Puerto Rico, Sub. Note, 7.625%, 12/20/2005		4,665,383
	970,000		Fleet National Bank, Series BKNT, 5.750%, 1/15/2009		1,027,036
	500,000		Household Finance Corp., 6.400%, 6/17/2008		540,165
	4,000,000	1	Household Finance Corp., 7.000%, 5/15/2012		4,435,680
	2,750,000		Household Finance Corp., Note, 6.750%, 5/15/2011		3,007,537
	500,000		Household Finance Corp., Note, 7.250%, 5/15/2006		539,980
	150,000		Household Finance Corp., Sr. Note, 5.875%, 9/25/2004		151,937
	500,000		Household Finance Corp., Unsecd. Note, 5.750%, 1/30/2007		528,910
	1,000,000		Hudson United Bancorp, 7.000%, 5/15/2012		1,083,260
	200,000		J.P. Morgan Chase & Co., Sub. Note, 6.000%, 2/15/2009		213,002
	100,000		JPM Capital Trust I, Company Guarantee, 7.540%, 1/15/2027		105,323
	275,000		Mellon Bank N.A., Pittsburgh, Sub. Note, 6.500%, 8/1/2005		285,453
	2,000,000		Northern Trust Corp., 4.600%, 2/1/2013		1,900,700
	320,000,000		OEK Oest. Kontrollbank, Gilt, 1.800%, 3/22/2010		3,062,907
	3,000,000		PNC Funding Corp., Sub. Note, 7.500%, 11/1/2009		3,405,930
Principal Amount					Value
			CORPORATE BONDS--continued
			Financial Institution - Banking--continued
$	1,449,029	2	Regional Diversified Funding, 9.250%, 3/15/2030	$	1,628,809
	300,000		Standard Federal Bank, N.A., Sub. Note, Series MTN, 7.750%, 7/17/2006		322,497
	300,000		Summit Capital Trust I, Bond, 8.400%, 3/15/2027		335,604
	500,000		SunTrust Banks, Inc., Sr. Note, 6.250%, 6/1/2008		541,570
	470,000	2	Swedbank, Sub., 7.500%, 11/29/2049		510,871
	100,000	1	U.S. Bancorp, Sub. Note, 8.000%, 7/2/2004		100,614
	500,000		U.S. Bank N.A., Sub. Note, 5.700%, 12/15/2008		528,975
	1,700,000		Union Planters Corp., 4.375%, 12/1/2010		1,658,112
	300,000		Wachovia Corp., Note, 7.550%, 8/18/2005		318,285
	395,000		Wachovia Corp., Sub. Note, 6.400%, 4/1/2008		427,038
	4,730,000		Washington Mutual Bank FA, Sub. Note, 6.875%, 6/15/2011		5,257,915
	4,000,000		Washington Mutual Finance Corp., Sr. Note, 8.250%, 6/15/2005		4,238,600
	150,000		Washington Mutual Inc., Sub. Note, 7.875%, 9/1/2004		152,187
	500,000		Wells Fargo Financial, Inc., 5.625%, 2/3/2009		529,660
			TOTAL		56,808,563
			Financial Institution - Brokerage--1.5%
	2,300,000		Amvescap PLC, Sr. Note, 6.600%, 5/15/2005		2,388,987
	100,000	1	Bear Stearns Cos., Inc., Note, 6.625%, 10/1/2004		101,615
	200,000		Bear Stearns Cos., Inc., Sr. Note, 7.000%, 3/1/2007		218,186
	500,000	1	Citigroup Global Markets Inc., Note, 6.875%, 6/15/2005		521,760
	2,645,000	2	FMR Corp., Bond, 7.570%, 6/15/2029		3,068,121
	750,000		Franklin Resources, Inc., 3.700%, 4/15/2008		737,333
	2,500,000		Goldman Sachs Group, Inc., 6.125%, 2/15/2033		2,359,825
	100,000		Goldman Sachs Group, Inc., Bond, 6.875%, 1/15/2011		110,013
	1,000,000		Goldman Sachs Group, Inc., Sr. Unsub., 6.650%, 5/15/2009		1,091,610
	1,290,000		Lehman Brothers Holdings, Inc., 7.500%, 9/1/2006		1,416,162
	530,000		Lehman Brothers Holdings, Inc., Note, 6.625%, 1/18/2012		576,942
	100,000		Lehman Brothers Holdings, Inc., Note, 6.625%, 2/5/2006		106,402
	400,000		Lehman Brothers Holdings, Inc., Note, 8.250%, 6/15/2007		451,228
	250,000		Lehman Brothers Holdings, Inc., Note, 8.500%, 8/1/2015		305,243
	325,000		Lehman Brothers, Inc., Sr. Sub. Note, 7.375%, 1/15/2007		355,667
	1,000,000		Merrill Lynch & Co., Inc., Sr. Unsub., 6.000%, 2/17/2009		1,064,200
	250,000		Morgan Stanley Group, Inc., 5.300%, 3/1/2013		245,823
	550,000		Morgan Stanley, Unsub., 6.100%, 4/15/2006		582,918
	2,250,000		Waddell & Reed Financial, Inc., 7.500%, 1/18/2006		2,409,593
			TOTAL		18,111,628
Principal Amount					Value
			CORPORATE BONDS--continued
			Financial Institution -- Finance Non-captive--1.0%
$	50,000		CIT Group, Inc., Note, 7.250%, 8/15/2005	$	52,887
	50,000		CIT Group, Inc., Note, 7.625%, 8/16/2005		53,084
	115,000		CIT Group, Inc., Sr. Note, 5.750%, 9/25/2007		121,665
	100,000	1	CIT Group, Inc., Sr. Note, 7.125%, 10/15/2004		102,067
	3,850,000	1	Capital One Financial Corp., Note, 7.125%, 8/1/2008		4,135,324
	50,000		General Electric Capital Corp., 5.350%, 3/30/2006		52,323
	250,000		General Electric Capital Corp., Note, Series MTNA, 4.625%, 9/15/2009		251,558
	2,500,000	1	General Electric Co., Note, 5.000%, 2/1/2013		2,454,800
	505,000		International Lease Finance Corp., Note, Series MTNN, 5.320%, 12/9/2007		526,801
	2,050,000		MBNA Corp., 7.500%, 3/15/2012		2,326,443
	1,500,000		SLM Corp., 5.625%, 4/10/2007		1,583,205
	743,000		Susa Partnership LP, Deb., 7.500%, 12/1/2027		843,974
			TOTAL		12,504,131
			Financial Institution - Insurance - Life--0.8%
	3,600,000		AXA-UAP, Sub. Note, 8.600%, 12/15/2030		4,397,256
	850,000		Delphi Financial Group, Inc., 9.310%, 3/25/2027		659,073
	360,000	2	Life Re Capital Trust I, Company Guarantee, 8.720%, 6/15/2027		374,954
	100,000		MetLife, Inc., Sr. Note, 6.125%, 12/1/2011		106,566
	3,000,000	2	Pacific LifeCorp., Bond, 6.600%, 9/15/2033		3,083,760
	400,000		Principal Financial Group, 6.125%, 10/15/2033		386,964
	150,000		Prudential Financial, Inc., 5.750%, 7/15/2033		137,826
	1,000,000	2	Reinsurance Group of America, Sr. Note, 7.250%, 4/1/2006		1,065,910
			TOTAL		10,212,309
			Financial Institution - Insurance -- P&C--1.0%
	400,000		Allstate Corp., Sr. Note, 7.875%, 5/1/2005		420,276
	1,600,000	2	Liberty Mutual Group, Unsecd. Note, 7.000%, 3/15/2034		1,546,768
	6,000,000	2	MBIA Global Funding LLC, 2.875%, 11/30/2006		5,931,960
	500,000	1	Marsh & McLennan Cos., Inc., 5.375%, 3/15/2007		523,905
	950,000		Marsh & McLennan Cos., Inc., Sr. Note, 7.125%, 6/15/2009		1,063,392
	1,000,000	2	Oil Insurance Ltd., Sub. Deb., 5.150%, 8/15/2033		1,002,060
	1,550,000		Travelers Property Casualty Corp., Sr. Note, 5.000%, 3/15/2013		1,499,362
	250,000		USF&G Corp., Company Guarantee, 8.470%, 1/10/2027		274,348
			TOTAL		12,262,071
Principal Amount					Value
			CORPORATE BONDS--continued
			Financial Institution -- REITS--0.2%
$	2,300,000		EOP Operating LP, 8.375%, 3/15/2006	$	2,509,599
			Foreign-Local-Government--0.5%
	3,900,000		Hydro Quebec, Sr. Deb., 6.300%, 5/11/2011		4,286,295
	900,000	1	Ontario, Province of, 4.375%, 2/15/2013		863,568
	1,000,000	1	Quebec, Province of, 5.500%, 4/11/2006		1,044,580
			TOTAL		6,194,443
			Sovereign--0.8%
	400,000,000		Inter-American Development Bank, 1.900%, 7/8/2009		3,853,115
	3,880,000		KFW-Kredit Wiederaufbau, 2.700%, 3/1/2007		3,815,126
	1,500,000	1	United Mexican States, 6.625%, 3/3/2015		1,507,500
			TOTAL		9,175,741
			State/Provincial--0.2%
	2,600,000		New South Wales, State of, Local Gov't. Guarantee, 6.500%, 5/1/2006		1,892,185
			Technology--1.1%
	2,000,000		Computer Sciences Corp., 7.375%, 6/15/2011		2,272,240
	4,000,000		Dell Computer Corp., Deb., 7.100%, 4/15/2028		4,441,320
	400,000		First Data Corp., MTN, Series MTND, 6.375%, 12/15/2007		434,820
	500,000		First Data Corp., Sr. Note, 5.625%, 11/1/2011		522,560
	500,000		Hewlett-Packard Co., Note, 5.750%, 12/15/2006		529,305
	500,000		IBM Corp., 4.875%, 10/1/2006		518,705
	1,150,000		IBM Corp., Deb., 8.375%, 11/1/2019		1,440,870
	300,000	1	IBM Corp., MTN, 5.400%, 10/1/2008		315,195
	350,000		IBM Corp., Note, 5.375%, 2/1/2009		366,772
	100,000		Texas Instruments, Inc., Note, 8.750%, 4/1/2007		113,196
	2,750,000		Unisys Corp., 8.125%, 6/1/2006		2,949,375
			TOTAL		13,904,358
			Transportation - Airlines--0.4%
	750,000		Delta Air Lines, Inc., Pass Thru Cert., 7.920%, 11/18/2010		506,250
	1,212,251		Northwest Airlines Corp., 7.935%, 4/1/2019		1,301,654
	669,516		Northwest Airlines Corp., Equip. Trust, 8.072%, 10/1/2019		720,567
	1,800,000	1	Southwest Airlines Co., 6.500%, 3/1/2012		1,907,262
			TOTAL		4,435,733
Principal Amount					Value
			CORPORATE BONDS--continued
			Transportation - Railroads--0.2%
$	1,850,000		Canadian Pacific RR, 7.125%, 10/15/2031	$	2,081,990
			Transportation - Services--0.4%
	3,500,000	2	FedEx Corp., Unsecd. Note, 2.650%, 4/1/2007		3,409,805
	650,000		Hertz Corp., 8.250%, 6/1/2005		682,955
	550,000		Hertz Corp., Note, 7.625%, 8/15/2007		589,551
			TOTAL		4,682,311
			Utility - Electric--1.6%
	800,000		Alabama Power Co., 2.800%, 12/1/2006		791,624
	2,500,000		Alabama Power Co., 5.700%, 2/15/2033		2,356,600
	3,000,000	1	American Electric Power Co., Inc., Note, 6.125%, 5/15/2006		3,168,870
	500,000		Baltimore Gas & Electric Co., Unsecd. Note, Series MTNG, 5.780%, 10/1/2008		533,220
	250,000		Enersis S.A., Note, 7.400%, 12/1/2016		227,500
	500,000		Entergy Louisiana, Inc., 1st Mtg. Bond, 6.500%, 3/1/2008		507,285
	939,483		Homer City Funding, Sr. Secd. Note, 8.734%, 10/1/2026		1,000,549
	250,000	2	Israel Electric Corp. Ltd., Sr. Note, 7.875%, 12/15/2026		259,783
	250,000		National Rural Utilities Cooperative Finance Corp., MTN, 5.750%, 12/1/2008		264,258
	2,050,000		Oncor, Inc., Deb., 7.000%, 9/1/2022		2,210,413
	3,000,000		PSEG Power LLC, Company Guarantee, 7.750%, 4/15/2011		3,407,100
	1,400,000		Pacific Gas & Electric Co., 6.050%, 3/1/2034		1,313,032
	300,000		Potomac Electric Power Co., 1st Mtg. Bond, 6.250%, 10/15/2007		324,864
	2,000,000		Public Service Electric & Gas Co., 4.000%, 11/1/2008		1,981,720
	400,000		West Penn Power Co., Note, Series A, 6.375%, 6/1/2004		401,936
	850,000		Wisconsin Power & Light Co., Note, 7.000%, 6/15/2007		926,636
			TOTAL		19,675,390
			Utility - Natural Gas Distributor--0.0%
	200,000		Michigan Consolidated Gas, 1st Mtg. Bond, Series C, 7.210%, 5/1/2007		220,124
			TOTAL CORPORATE BONDS (IDENTIFIED COST $389,266,941)		394,810,981
			ASSET-BACKED SECURITIES--0.2%
			Credit Card--0.1%
	1,500,000		Prime Credit Card Master Trust 2000-1, Class A, 6.700%, 10/15/2009		1,590,765
			Home Equity Loan--0.0%
	270,074	2	125 Home Loan Owner Trust 1998-1A, Class B1, 9.260%, 2/15/2029		273,998
Principal Amount					Value
			ASSET-BACKED SECURITIES--continued
			Manufactured Housing--0.0%
$	398,824		Green Tree Financial Corp. 1999-5, Class B1, 9.200%, 4/1/2031	$	26,047
			Rate Reduction Bond--0.0%
	368,197		California Infrastructure & Economic Development Bank Special Purpose Trust PG&E-1, Class A7, 6.420%, 9/25/2008		384,107
			Structured Product (ABS)--0.1%
	750,000		Citibank Credit Card Master Trust 1997-6, Class A, 8/15/2006		748,305
			TOTAL ASSET-BACKED SECURITIES (IDENTIFIED COST $3,200,691)		3,023,222
			GOVERNMENT AGENCIES--8.6%
	715,000		Federal Farm Credit System, 9.200%, 8/22/2005		775,561
	450,000		Federal Home Loan Bank System, Bond, Series 363, 4.500%, 11/15/2012		432,189
	100,000		Federal Home Loan Bank System, Bond, Series PJ08, 5.485%, 9/22/2009		105,672
	200,000		Federal Home Loan Bank System, Bond, Series KS08, 5.665%, 9/11/2008		212,826
	535,000		Federal Home Loan Bank System, Bond, Series NV09, 6.500%, 11/13/2009		587,869
	140,000		Federal Home Loan Bank System, Bond, Series EA10, 7.625%, 5/14/2010		162,235
	100,000		Federal Home Loan Bank System, Bond, Series VB09, 4.125%, 9/22/2009		100,833
	1,500,000		Federal Home Loan Bank System, Series HS07, 2.500%, 6/18/2007		1,456,860
	6,000,000	1	Federal Home Loan Mortgage Corp., Note, 2.125%, 11/15/2005		5,979,180
	600,000		Federal Home Loan Mortgage Corp., Note, 5.500%, 7/15/2006		631,794
	50,000		Federal Home Loan Mortgage Corp., Unsecd. Note, 6.500%, 8/24/2016		50,557
	200,000		Federal Home Loan Mortgage Corp., Unsecd. Note, 4.500%, 3/28/2012		203,324
	12,500,000		Federal National Mortgage Association, 3.250%, 1/15/2008		12,296,500
	600,000	1	Federal National Mortgage Association, 3.875%, 3/15/2005		609,792
	1,780,000		Federal National Mortgage Association, Bond, 6.625%, 11/15/2030		1,944,899
	26,000,000		Federal National Mortgage Association, Note, 2.150%, 7/28/2006		25,562,420
	1,500,000	1	Federal National Mortgage Association, Note, 3.250%, 11/15/2007		1,481,460
	1,000,000	1	Federal National Mortgage Association, Note, 4.250%, 7/15/2007		1,022,770
	1,250,000	1	Federal National Mortgage Association, Note, 4.375%, 10/15/2006		1,287,675
	600,000	1	Federal National Mortgage Association, Note, 5.000%, 1/15/2007		627,072
	8,000,000	1	Federal National Mortgage Association, Note, 5.500%, 2/15/2006		8,384,000
	38,000,000		Federal National Mortgage Association, Note, 2.500%, 8/11/2006		37,632,540
	1,900,000		Federal National Mortgage Association, Unsecd. Note, 6.500%, 8/15/2004		1,920,824
	70,000		Student Loan Marketing Association, Note, 7.300%, 8/1/2012		80,923
	1,000,000		Tennessee Valley Authority, Series C, 6.000%, 3/15/2013		1,063,590
			TOTAL GOVERNMENT AGENCIES (IDENTIFIED COST $105,243,584)		104,613,365
Principal Amount					Value
			GOVERNMENTS/AGENCIES--2.8%
			Sovereign--2.8%
$	4,600,000		Austria, Government of, Bond, 5.000%, 1/15/2008	$	5,954,747
	3,000,000		Canada, Government of, 5.000%, 9/1/2004		2,223,830
	205,000		Canada, Government of, Bond, 5.500%, 6/1/2009		159,896
	187,000		Canada, Government of, Deb., 6.500%, 6/1/2004		137,630
	4,700,000		Germany, Government of, Bond, 4.000%, 2/16/2007		5,907,964
	700,000		Germany, Government of, Bond, 5.000%, 1/4/2012		908,550
	3,450,000		Italy, Government of, 4.500%, 5/1/2009		4,384,311
	398,000,000		Italy, Government of, Bond, 1.800%, 2/23/2010		5,978,983
	4,500,000		Italy, Government of, Bond, 5.500%, 11/1/2010		3,803,175
	2,900,000		Norway, Government of, Foreign Gov't. Guarantee, 5.750%, 11/30/2004		439,195
	3,150,000		Sweden, Government of, Deb., 6.500%, 5/5/2008		466,026
	1,500,000		United Kingdom, Government of, Bond, 5.000%, 3/7/2008		2,740,850
	250,000		United Kingdom, Government of, Treasury Bill, 5.000%, 3/7/2012		453,920
			TOTAL GOVERNMENT/AGENCIES (IDENTIFIED COST $27,214,315)		33,559,077
			U.S. TREASURY--8.6%
			U.S. Treasury Bonds--7.0%
	36,900,000	1	United States Treasury Bond, 12.750%, 11/15/2010		42,406,218
	3,700,000	1	United States Treasury Bond, 8.125%, 5/15/2021		4,871,272
	1,300,000	1	United States Treasury Bond, 6.250%, 8/15/2023		1,432,028
	1,343,000	1	United States Treasury Bond, 6.000%, 2/15/2026		1,439,521
	300,000	1	United States Treasury Bond, 6.750%, 8/15/2026		350,907
	2,200,000	1	United States Treasury Bond, 6.500%, 11/15/2026		2,502,500
	4,935,000	1	United States Treasury Bond, 6.125%, 11/15/2027		5,379,940
	8,000,000	1	United States Treasury Bond, 5.500%, 8/15/2028		8,061,280
	2,215,000		United States Treasury Bond, 5.250%, 11/15/2028		2,158,584
	6,000,000	1	United States Treasury Bond, 6.250%, 5/15/2030		6,686,280
	10,465,000	1	United States Treasury Bond, 5.375%, 2/15/2031		10,509,162
			TOTAL		85,797,692
			U.S. Treasury Notes--1.6%
	19,000,000		United States Treasury Note, 4.750%, 5/15/2014		19,151,430
			TOTAL U.S. TREASURY (IDENTIFIED COST $104,821,800)		104,949,122
Principal Amount					Value
			MORTGAGE-BACKED SECURITIES--0.2%
			Federal Home Loan Mortgage Corp.--0.0%
$	643		Federal Home Loan Mortgage Corp., Pool G40281, 6.500%, 7/1/2004	$	644
			Federal National Mortgage Assoc.--0.0%
	78,831		Federal National Mortgage Association, Pool 390900, 7.500%, 6/1/2012		84,570
			Government National Mortgage Assoc.--0.2%
	147,140		Government National Mortgage Association, Pool 412615, 7.500%, 6/15/2026		157,991
	8,382		Government National Mortgage Association, Pool 432701, 8.000%, 6/15/2026		9,146
	32,352		Government National Mortgage Association, Pool 433329, 7.500%, 12/15/2026		34,698
	3,846		Government National Mortgage Association, Pool 433505, 7.500%, 4/15/2027		4,130
	8,453		Government National Mortgage Association, Pool 444274, 7.500%, 1/15/2027		9,066
	3,154		Government National Mortgage Association, Pool 446820, 8.000%, 8/15/2027		3,434
	749,856		Government National Mortgage Association, Pool 456873, 6.500%, 5/15/2028		781,261
	27,234		Government National Mortgage Association, Pool 460881, 7.000%, 7/15/2028		28,868
	42,284		Government National Mortgage Association, Pool 468225, 6.500%, 9/15/2028		44,055
	10,266		Government National Mortgage Association, Pool 571225, 6.500%, 10/15/2031		10,677
	716,464		Government National Mortgage Association, Pool 615490, 4.500%, 8/15/2033		671,907
	384,196		Government National Mortgage Association, Pool 780626, 7.000%, 8/15/2027		408,688
			TOTAL		2,163,921
			TOTAL MORTGAGE-BACKED SECURITIES (IDENTIFIED COST $2,180,556)		2,249,135
			COLLATERALIZED MORTGAGE OBLIGATIONS--0.9%
			Federal Home Loan Mortgage Corp.--0.0%
	659,825		Federal Home Loan Mortgage Corp., Series 1602, Class PH, 6.000%, 4/15/2023		684,423
			Federal National Mortgage Assoc.--0.0%
	84,838		Federal National Mortgage Association, Series 1988-16, Class B, 9.500%, 6/25/2018		92,373
	28,159		Federal National Mortgage Association, Series 1989-35, Class G, 9.500%, 7/25/2019		30,196
			TOTAL		122,569
			Non-Agency Mortgage--0.0%
	62,036	2	SMFC Trust Asset-Backed Certificates, Series 1997-A, Class 4, 3.59421%, 1/28/2025		47,554
			Structured Product (ABS)--0.9%
	10,676,829		Morgan Stanley Capital, Inc. 2004-T13, Class A1, 2.850%, 9/13/2045		10,454,217
			TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS (IDENTIFIED COST $11,545,494)		11,308,763
Shares or Principal Amount					Value
			PREFERRED STOCK--0.1%
			Financial Institution - Banking--0.1%
	21,000		Citigroup, Inc., Cumulative Pfd., Series F, 6.365%, Quarterly Dividend (IDENTIFIED COST $1,003,086)	$	1,086,750
			MUNICIPALS--0.1%
			Consumer Cyclical - Services--0.1%
$	725,000		Harvard University, Revenue Bonds, 8.125% Bonds, 4/15/2007 (IDENTIFIED COST $766,355)		818,561
			MUTUAL FUNDS--51.7%3
	1,912,585		Emerging Markets Fixed Income Core Fund		26,864,026
	16,947,340		High Yield Bond Portfolio		114,564,013
	38,763,159		Mortgage Core Portfolio		386,856,331
	26,351,033		Prime Value Obligations Fund, IS Shares		26,351,033
	74,631,058		Prime Value Obligations Fund, IS Shares (held as collateral for securities lending)		74,631,058
			TOTAL MUTUAL FUNDS (IDENTIFIED COST $629,153,641)		629,266,461
			TOTAL INVESTMENTS--105.7% (IDENTIFIED COST $1,274,396,463)4		1,285,685,437
			OTHER ASSETS AND LIABILITIES -- NET--(5.7)%		(69,830,233	)
			TOTAL NET ASSETS--100%	$	1,215,855,204

1 Certain principal amounts are temporarily on loan to unaffiliated broker/dealers.

2 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 May 31, 2004, these securities amounted to $28,865,850 which represents 2.4% of total net assets.

3 Affiliated company.

4 The cost of investments for federal tax purposes amounts to $1,274,396,463.

Note: The categories of investments are shown as a percentage of total net assets at May 31, 2004.

The following acronyms are used throughout this portfolio:

ABS	- --Asset-Backed Securities
MTN	- --Medium Term Note
REITS	- --Real Estate Investment Trust Securities

See Notes which are an integral part of the Financial Statements

Statement of Assets and Liabilities

May 31, 2004 (unaudited)

Assets:
Total investments in securities, at value including $629,266,461 of investments in affiliated issuers (Note 5) and $72,297,841 of securities loaned (identified cost $1,274,396,463)			$	1,285,685,437
Cash denominated in foreign currency (identified cost $1,449,893)				1,460,517
Income receivable				8,173,466
Receivable for investments sold				24,548,564
Receivable for shares sold				1,758,586
Prepaid expenses				186,202
TOTAL ASSETS				1,321,812,772
Liabilities:
Payable for investments purchased	$	24,382,257
Payable for shares redeemed		3,199,782
Payable to bank		916,119
Income distribution payable		2,563,552
Payable for collateral due to broker		74,631,058
Payable for distribution service fee (Note 5)		122,568
Payable for shareholder service fee (Note 5)		142,232
TOTAL LIABILITIES				105,957,568
Net assets for 114,788,354 shares outstanding			$	1,215,855,204
Net Assets Consist of:
Paid-in capital			$	1,207,675,252
Net unrealized appreciation of investments and translation of assets and liabilities in foreign currency				11,300,614
Accumulated net realized loss on investments and foreign currency transactions				(3,171,050	)
Undistributed net investment income				50,388
TOTAL NET ASSETS			$	1,215,855,204

Statement of Assets and Liabilities-continued

Net Asset Value, Offering Price and Redemption Proceeds Per Share
Institutional Shares:
Net asset value per share ($518,676,068 ÷ 48,969,025 shares outstanding)	$10.59
Offering price per share	$10.59
Redemption proceeds per share	$10.59
Institutional Service Shares:
Net asset value per share ($487,151,247 ÷ 45,987,181 shares outstanding)	$10.59
Offering price per share	$10.59
Redemption proceeds per share	$10.59
Class A Shares:
Net asset value per share ($62,332,366 ÷ 5,888,745 shares outstanding)	$10.59
Offering price per share (100/95.50 of $10.59)1	$11.09
Redemption proceeds per share	$10.59
Class B Shares:
Net asset value per share ($63,059,008 ÷ 5,953,362 shares outstanding)	$10.59
Offering price per share	$10.59
Redemption proceeds per share (94.50/100 of $10.59)1	$10.01
Class C Shares:
Net asset value per share ($57,964,511 ÷ 5,472,264 shares outstanding)	$10.59
Offering price per share (100/99.00 of $10.59)1	$10.70
Redemption proceeds per share (99.00/100 of $10.59)1	$10.48
Class K Shares:
Net asset value per share ($26,672,004 ÷ 2,517,777 shares outstanding)	$10.59
Offering price per share	$10.59
Redemption proceeds per share	$10.59

1 See "What Do Shares Cost?" in the Prospectus.

See Notes which are an integral part of the Financial Statements

Statement of Operations

Six Months Ended May 31, 2004 (unaudited)

Investment Income:
Dividends (including income received from affiliated issuers of $14,453,889) (Note 5)			$	14,453,889
Income allocated from partnership (Note 5)				1,095,688
Interest (including income on securities loaned of $39,557)				16,187,482
TOTAL INCOME				31,737,059
Expenses:
Investment adviser fee (Note 5)	$	2,487,269
Administrative personnel and services fee (Note 5)		496,832
Custodian fees		35,004
Transfer and dividend disbursing agent fees and expenses--Institutional Shares (Note 5)		112,201
Transfer and dividend disbursing agent fees and expenses-- Institutional Service Shares (Note 5)		110,565
Transfer and dividend disbursing agent fees and expenses-- Class A Shares (Note 5)		36,322
Transfer and dividend disbursing agent fees and expenses-- Class B Shares (Note 5)		33,544
Transfer and dividend disbursing agent fees and expenses-- Class C Shares (Note 5)		21,431
Transfer and dividend disbursing agent fees and expenses-- Class K Shares (Note 5)		31,336
Directors'/Trustees' fees		5,371
Auditing fees		7,914
Legal fees		3,167
Portfolio accounting fees (Note 5)		101,701
Distribution services fee--Institutional Service Shares (Note 5)		614,566
Distribution services fee--Class A Shares (Note 5)		85,484
Distribution services fee--Class B Shares (Note 5)		255,638
Distribution services fee--Class C Shares (Note 5)		218,269
Distribution services fee--Class K Shares (Note 5)		54,166
Shareholder services fee--Institutional Shares (Note 5)		669,441
Shareholder services fee--Institutional Service Shares (Note 5)		614,566
Shareholder services fee--Class A Shares (Note 5)		85,484
Shareholder services fee--Class B Shares (Note 5)		85,212
Shareholder services fee--Class C Shares (Note 5)		72,756
Share registration costs		91,099

Statement of Operations-continued

Expenses--continued:
Printing and postage				$	43,262
Insurance premiums					7,484
Taxes					47,295
Miscellaneous					3,472
EXPENSES BEFORE ALLOCATION					6,430,851
Expenses allocated from partnership (Note 5)					6,982
TOTAL EXPENSES					6,437,833
Waivers/Reimbursement (Note 5):
Waiver/reimbursement of investment adviser fee	$	(1,301,138	)
Waiver of administrative personnel and services fee		(23,008	)
Waiver of transfer and dividend disbursing agent fees and expenses--Institutional Shares		(25,589	)
Waiver of transfer and dividend disbursing agent fees and expenses--Institutional Service Shares		(31,020	)
Waiver of transfer and dividend disbursing agent fees and expenses--Class A Shares		(1,917	)
Waiver of transfer and dividend disbursing agent fees and expenses--Class B Shares		(1,905	)
Waiver of transfer and dividend disbursing agent fees and expenses--Class C Shares		(1,720	)
Waiver of transfer and dividend disbursing agent fees and expenses--Class K Shares		(723	)
Waiver of distribution services fee--Institutional Service Shares		(491,653	)
Waiver of shareholder services fee--Institutional Shares		(669,441	)
TOTAL WAIVERS AND REIMBURSEMENT					(2,548,114	)
Net expenses							$	3,889,719
Net investment income								27,847,340
Realized and Unrealized Gain (Loss) on Investments and Foreign Currency Transactions:
Net realized gain on investments and foreign currency transactions (including realized loss of $582,770 on sales of investments in affiliated issuers (Note 5))								1,331,131
Net realized gain allocated from partnership								744,205
Net change in unrealized appreciation of investments and translation of assets and liabilities in foreign currency								(21,052,098	)
Net realized and unrealized loss on investments and foreign currency transactions								(18,976,762	)
Change in net assets resulting from operations							$	8,870,578

See Notes which are an integral part of the Financial Statements

Statement of Changes in Net Assets

		Six Months Ended (unaudited) 5/31/2004			Year Ended 11/30/2003
Increase (Decrease) in Net Assets
Operations:
Net investment income	$	27,847,340		$	46,022,783
Net realized gain (loss) on investments including allocation from partnership and foreign currency transactions		2,075,336			4,748,084
Net change in unrealized appreciation/depreciation of investments and translation of assets and liabilities in foreign currency		(21,052,098	)		1,816,471
CHANGE IN NET ASSETS RESULTING FROM OPERATIONS		8,870,578			52,587,338
Distributions to Shareholders:
Distributions from net investment income
Institutional Shares		(12,835,647	)		(23,708,449	)
Institutional Service Shares		(11,051,730	)		(16,057,470	)
Class A Shares		(1,459,335	)		(3,308,045	)
Class B Shares		(1,291,040	)		(2,584,971	)
Class C Shares		(1,107,044	)		(959,987	)
Class K Shares		(439,614	)		(63,122	)
CHANGE IN NET ASSETS RESULTING FROM DISTRIBUTIONS TO SHAREHOLDERS		(28,184,410	)		(46,682,044	)
Share Transactions:
Proceeds from sale of shares		271,863,366			623,887,408
Proceeds from shares issued in connection with the tax-free transfer of assets from United Trust Bank		--			6,840,796
Proceeds from shares issued in connection with the tax-free transfer of assets from United Trust Bank		--			64,075,774
Proceeds from shares issued in connection with the tax-free transfer of assets from Founders		--			1,277,385
Proceeds from shares issued in connection with the taxable transfer of assets from Founders		--			629,074
Proceeds from shares issued in connection with the tax-free transfer of assets from Riggs Bank		--			16,177,030
Proceeds from shares issued in connection with the tax-free transfer of assets from Federated Managed Income Portfolio		79,497,244
Net asset value of shares issued to shareholders in payment of distributions declared		13,145,154			22,372,713
Cost of shares redeemed		(294,223,200	)		(399,564,861	)
CHANGE IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS		70,282,564			335,695,319
Change in net assets		50,968,732			341,600,613
Net Assets:
Beginning of period		1,164,886,472			823,285,859
End of period (including undistributed net investment income of $50,388 and $387,458, respectively)	$	1,215,855,204		$	1,164,886,472

See Notes which are an integral part of the Financial Statements

Notes to Financial Statements

May 31, 2004 (unaudited)

1. 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 six classes of shares: Institutional Shares, Institutional Service Shares, Class A Shares, Class B Shares, Class C Shares and Class K Shares. Effective April 8, 2003, the Fund added Class K Shares. The investment objective of the Fund is to provide total return.

On June 23, 2003, the Fund received a tax-free transfer of assets from the United Trust Bank Fixed-Income Fund A Common Trust and United Trust Bank EB Bond Fund, as follows:

	Shares of the Fund Issued in Relation to Tax-Free Transfer of Assets	Tax-Free Transfer of Common Trust Fund Net Assets Received	Unrealized Appreciation Included in Tax-Free Net Assets Received1
Institutional Shares	620,199	$  6,840,796	$  429,746
Institutional Service Shares	5,809,227	$64,075,774	$3,972,294

Net Assets of Fund Prior to Combination	Net Assets of Common Trust Funds Immediately Prior to Combination	Net Assets of Fund Immediately After Combination
$1,063,163,494	$70,916,570	$1,134,080,064

1 Unrealized appreciation is included in the Tax-Free Transfer of Common Trust Fund Net Assets Received amount shown above.

On July 21, 2003, the Fund received a tax-free transfer of assets from the Founders Government Securities-Personal Trust Common Trust Fund and a taxable transfer of assets from the Founders Government Securities-Retirement Trust Common Trust Fund, as follows:

Institutional Service Shares of the Fund Issued in Relation to Tax-Free Transfer of Assets	Institutional Service Shares of the Fund Issued in Relation to Taxable Transfer of Assets	Tax-Free Transfer of Common Trust Fund Net Assets Received	Taxable Transfer of Common Trust Fund Net Assets Received	Unrealized Appreciation Included in Tax-Free Net Assets Received1
118,058	58,140	$1,277,385	$629,074	$5,743

Net Assets of Fund Prior to Combination	Net Assets of Common Trust Funds Immediately Prior to Combination	Net Assets of Fund Immediately After Combination
$1,139,809,010	$1,906,459	$1,141,715,469

1 Unrealized appreciation is included in the Tax-Free Transfer of Common Trust Fund Net Assets Received amount shown above.

On September 26, 2003, the Fund received a tax-free transfer of assets from the Riggs Bond Fund, as follows:

Institutional Service Shares of the Fund Issued in Relation to Tax-Free Transfer of Assets	Tax-Free Transfer of Riggs Bond Fund Net Assets Received	Unrealized Appreciation Included in Tax-Free Net Assets Received1
1,495,104	$16,177,030	$537,833

Net Assets of Fund Prior to Combination	Net Assets of Riggs Bond Fund Immediately Prior to Combination	Net Assets of Fund Immediately After Combination
$1,126,454,883	$16,177,030	$1,142,631,913

1 Unrealized appreciation is included in the Tax-Free Transfer of Riggs Bond Fund Net Assets Received amount shown above.

On December 18, 2003, the Fund received a tax-free transfer of assets from the Federated Managed Income Portfolio, as follows:

	Shares of the Fund Issued in Relation to Tax-Free Transfer of Assets	Tax-Free Transfer of Federated Managed Income Portfolio Net Assets Received	Unrealized Appreciation Included in Tax-Free Net Assets Received1
Institutional Service Shares	4,911,638	$50,694,544	$2,097,055
Class C Shares	2,698,226	$28,802,700	$ 298,971

Net Assets of Fund Prior to Combination	Net Assets of Federated Managed Income Portfolio Immediately Prior to Combination	Net Assets of Fund Immediately After Combination
$1,167,525,735	$79,497,244	$1,247,022,979

1 Unrealized appreciation is included in the Tax-Free Transfer of Federated Managed Income Portfolio Net Assets Received amount shown above.

2. 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 (GAAP) in the United States of America.

Investment Valuation

Domestic and foreign equity securities are valued at the last sale price or official closing price reported in the market in which they are primarily traded (either a national securities exchange or the over-the-counter market), if available. If unavailable, the security is generally valued at the mean between the last closing bid and asked prices. 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 (NYSE). Therefore, foreign securities are valued at the latest closing price on the exchange on which they are traded immediately prior to the closing of the NYSE. Foreign securities quoted in foreign currencies are translated in U.S. dollars at the foreign exchange rate in effect at 4:00 p.m., Eastern time, on the day the value of the foreign security is determined. Fixed income, listed corporate bonds, 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. Securities for which no quotations are readily available or whose values have been affected by a significant event occurring between the close of their primary markets and the closing of the NYSE are valued at fair value as determined in accordance with procedures established by and under general supervision of the Board of Directors (the "Directors").

Pursuant to an Exemptive Order issued by the Securities and Exchange Commission (SEC), the Fund may invest in Federated Core Trust, (Core Trust) which is managed by Federated Investment Management Company, the Fund's adviser. Core Trust is an open-end management company, registered under the Investment Company Act of 1940, available only to registered investment companies and other institutional investors. The investment objective of Federated Mortgage Core Portfolio, a series of Core Trust, is to seek total return by investing in a diversified portfolio of mortgage-backed fixed income securities. Federated receives no advisory or administrative fees on behalf of Core Trust. Income distributions from Core Trust are declared daily and paid monthly, and are recorded by the Fund as dividend income. Capital gain distributions, if any, from Core Trust are declared and paid annually, and are recorded by the Fund as capital gains. Additional information regarding Federated Mortgage Core Portfolio is available upon request.

The Fund may also invest in Federated Core Trust II, (the "Core Trust II"), pursuant to a separate Exemptive Order issued by the SEC. Core Trust II is independently managed by Federated Investment Counseling. Core Trust II is a limited partnership established under the laws of the State of Delaware, on November 13, 2000, registered under the Act, and offered only to registered investment companies and other accredited investors. The investment objective of Emerging Markets Fixed Income Core Fund (EMCORE), a series of Core Trust II, is to achieve total return on assets. Federated receives no advisory or administrative fees on behalf of the Core Trust II. The Fund records daily its proportionate share of income, expenses, unrealized gains and losses and realized gains and losses from EMCORE. Additional information regarding EMCORE is available upon request.

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 the 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 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. 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 transfer and dividend disbursing agent, 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.

Premium and Discount Amortization/Paydown Gains and Losses

All premiums and discounts on fixed income securities are amortized/accreted for financial statement purposes. Gains and losses realized on principal payment of mortgage-backed securities (paydown gains and losses) are classified as part of investment income.

Federal Taxes

It is the Fund's policy to comply with the Subchapter M provision of the Internal Revenue Code (the "Code") and to distribute to shareholders each year substantially all of its income. Accordingly, no provision for federal tax is necessary.

Other Taxes

As an open-end management investment company incorporated in the state of Maryland but domiciled in Pennsylvania, the Fund is subject to the Pennsylvania Franchise Tax. This franchise tax is assessed annually on the value of the Fund, as represented by average net assets for the tax 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.

Foreign Exchange Contracts

The Fund may enter into foreign currency commitments for the delayed delivery of securities or foreign currency exchange transactions. The Fund may enter into foreign currency contract transactions to protect assets against adverse changes in foreign currency exchange rates or exchange control regulations. Purchased contracts are used to acquire exposure to foreign currencies; whereas, contracts to sell are used to hedge the Fund's securities against currency fluctuations. Risks may arise upon entering these transactions from the potential inability of counterparties to meet the terms of their commitments and from unanticipated movements in security prices or foreign exchange rates. The foreign currency transactions are adjusted by the daily exchange rate of the underlying currency and any gains or losses are recorded for financial statement purposes as unrealized until the settlement date. At May 31, 2004, the Fund had no outstanding foreign currency commitments.

Foreign Currency Translation

The accounting records of the Fund are maintained in U.S. dollars. All assets and liabilities denominated in foreign currencies (FCs) are translated into U.S. dollars based on the rate of exchange of such currencies against U.S. dollars on the date of valuation. Purchases and sales of securities, income and expenses are translated at the rate of exchange quoted on the respective date that such transactions are recorded. The Fund does not isolate that portion of the results of operations resulting from changes in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities held. Such fluctuations are included with the net realized and unrealized gain or loss from investments.

Reported net realized foreign exchange gains or losses arise from sales of portfolio securities, sales and maturities of short-term securities, sales of FCs, currency gains or losses realized between the trade and settlement dates on securities transactions, the difference between the amounts of dividends, interest and foreign withholding taxes recorded on the Fund's books, and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains and losses arise from changes in the value of assets and liabilities other than investments in securities at fiscal year end, resulting from changes in the exchange rate.

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 in accordance with procedures established by and under general supervision of the Directors.

Securities Lending

The Fund participates in a securities lending program providing for the lending of corporate bonds, equity and government securities to qualified brokers. Collateral for securities loaned is invested in an affiliated money market fund. Collateral is maintained at a minimum level of 102% of the market value of investments loaned, plus interest, if applicable. Earnings on collateral are allocated between the securities lending agent, as a fee for its services under the program, and the Fund, according to agreed-upon rates.

As of May 31, 2004, securities subject to this type of arrangement and related collateral were as follows:

Market Value of Securities Loaned	Market Value of Collateral
$72,297,841	$74,631,058

Use of Estimates

The preparation of financial statements in conformity with GAAP 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.

3. CAPITAL STOCK

At May 31, 2004, 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 Services Shares	1,000,000,000
Class A Shares	1,000,000,000
Class B Shares	1,000,000,000
Class C Shares	1,000,000,000
Class K Shares	1,000,000,000
TOTAL	6,000,000,000

Transactions in capital stock were as follows:

	Six Months Ended 5/31/2004					Year Ended 11/30/2003
Institutional Shares:	Shares			Amount		Shares			Amount
Shares sold	12,456,922		$	135,177,329		22,560,102		$	244,230,985
Shares issued in connection with the tax-free transfer of assets from United Trust Bank Employee Bond Fund	--			--		620,199			6,840,796
Shares issued to shareholders in payment of distributions declared	294,287			3,181,029		568,477			6,145,109
Shares redeemed	(11,151,531	)		(120,516,310	)	(18,056,517	)		(194,521,811	)
NET CHANGE RESULTING FROM INSTITUTIONAL SHARE TRANSACTIONS	1,599,678		$	17,842,048		5,692,261		$	62,695,079
	Six Months Ended 5/31/2004					Year Ended 11/30/2003
Institutional Service Shares:	Shares			Amount		Shares			Amount
Shares sold	7,986,884		$	88,897,800		21,411,036		$	231,051,666
Shares issued in connection with the tax-free transfer of assets from United Trust Bank Fixed Income Fund A	--			--		5,809,227			64,075,774
Shares issued in connection with the tax-free transfer of assets from Founders Government Securities-Personal Trust	--			--		118,058			1,277,385
Shares issued in connection with the taxable Transfer of assets from Founders Government Securities-Retirement Trust	--			--		58,140			629,074
Shares issued in connection with the tax-free transfer of assets from Riggs Bond Fund	--			--		1,495,104			16,177,030
Shares issued in connection with the tax-free transfer of assets from Federated Managed Income Portfolio	4,911,638			50,694,544		--			--
Shares issued to shareholders in payment of distributions declared	618,497			6,684,765		1,006,402			10,877,698
Shares redeemed	(8,690,786	)		(93,960,312	)	(12,576,112	)		(135,877,771	)
NET CHANGE RESULTING FROM INSTITUTIONAL SERVICE SHARE TRANSACTIONS	4,826,233		$	52,316,797		17,321,855		$	188,210,856

	Six Months Ended 5/31/2004					Year Ended 11/30/2003
Class A Shares:	Shares			Amount		Shares			Amount
Shares sold	1,768,369		$	19,038,148		5,974,269		$	64,560,078
Shares issued to shareholders in payment of distributions declared	108,433			1,172,297		258,708			2,795,022
Shares redeemed	(4,797,042	)		(52,045,596	)	(3,141,326	)		(33,901,279	)
NET CHANGE RESULTING FROM CLASS A SHARE TRANSACTIONS	(2,920,240	)	$	(31,835,151	)	3,091,651		$	33,453,821
	Six Months Ended 5/31/2004					Year Ended 11/30/2003
Class B Shares:	Shares			Amount		Shares			Amount
Shares sold	422,549		$	4,574,307		3,468,482		$	37,554,448
Shares issued to shareholders in payment of distributions declared	86,883			939,350		171,604			1,854,378
Shares redeemed	(1,219,885	)		(13,187,430	)	(1,909,180	)		(20,514,400	)
NET CHANGE RESULTING FROM CLASS B SHARE TRANSACTIONS	(710,453	)	$	(7,673,773	)	1,730,906		$	18,894,426
	Six Months Ended 5/31/2004					Year Ended 11/30/2003
Class C Shares:	Shares			Amount		Shares			Amount
Shares sold	725,269		$	8,215,288		2,975,647		$	32,309,877
Shares issued in connection with the tax-free transfer of assets from Federated Managed Income Portfolio	2,698,226			28,802,700		--			--
Shares issued to shareholders in payment of distributions declared	67,527			729,892		58,988			637,389
Shares redeemed	(1,061,434	)		(11,483,755	)	(1,336,995	)		(14,362,203	)
NET CHANGE RESULTING FROM CLASS C SHARE TRANSACTIONS	2,429,588		$	26,264,125		1,697,640		$	18,585,063
	Six Months Ended 5/31/2004					Period Ended 11/30/20031
Class K Shares:	Shares			Amount		Shares			Amount
Shares sold	1,470,656		$	15,960,494		1,318,135		$	14,180,354
Shares issued to shareholders in payment of distributions declared	40,559			437,821		5,871			63,117
Shares redeemed	(281,365	)		(3,029,797	)	(36,079	)		(387,397	)
NET CHANGE RESULTING FROM CLASS K SHARE TRANSACTIONS	1,229,850		$	13,368,518		1,287,927		$	13,856,074
NET CHANGE RESULTING FROM SHARE TRANSACTIONS	6,454,656		$	70,282,564		30,822,240		$	335,695,319

1 Reflects operations for the period from April 8, 2003 (start of performance) to November 30, 2003.

4. FEDERAL TAX INFORMATION

At May 31, 2004, the cost of investments for federal tax purposes was $1,274,396,463. The net unrealized appreciation of investments for federal tax purposes was $11,288,974. This consists of net unrealized appreciation from investments for those securities having an excess of value over cost of $33,233,809 and net unrealized depreciation from investments for those securities having an excess of cost over value of $21,944,835.

At November 30, 2003, the Fund had a capital loss carryforward of $4,064,021 which will reduce the Fund's taxable income arising from future net realized gains on investments, if any, to the extent permitted by the Code and thus will reduce the amount of 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 2010.

5. 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.

Pursuant to an Exemptive Order issued by the Securities and Exchange Commission, the Fund may invest in other funds which are managed by the Adviser or an affiliate of the Adviser. The Adviser has agreed to reimburse certain investment adviser fees as a result of these transactions. Income distributions earned from investments in these funds are recorded as income in the accompanying financial statements and are listed below.

Federated Mortgage Core Portfolio	$	9,415,568
High-Yield Bond Portfolio	$	4,776,422
Emerging Markets Fixed Income Core Fund	$	1,095,688
Prime Value Obligations Fund	$	261,899

Administrative Fee

Federated Administrative Services (FAS), under the Administrative Services Agreement (Agreement), provides the Fund with administrative personnel and services. The fee paid to FAS is based on the average aggregate daily net assets of all Federated funds as specified below:

Maximum Administrative Fee	Average Aggregate Daily Net Assets of the Federated Funds
0.150%	on the first $5 billion
0.125%	on the next $5 billion
0.100%	on the next $10 billion
0.075%	on assets in excess of $20 billion

The administrative fee received during any fiscal year shall be at least $150,000 per portfolio and $40,000 per each additional class of Shares. FAS may voluntarily choose to waive any portion of its fee. FAS can modify or terminate this voluntary waiver at any time at its sole discretion.

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 daily net assets of the Institutional Service Shares, Class A Shares, Class B Shares, Class C Shares and Class K Shares to finance activities intended to result in the sale of these Shares. The Plan provides that the Fund may incur distribution expenses according to the following schedule annually, to compensate FSC.

Share Class Name	Percentage of Average Daily Net Assets of Class
Institutional Service Shares	0.25%
Class A Shares	0.25%
Class B Shares	0.75%
Class C Shares	0.75%
Class K Shares	0.50%

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.

Sales Charges

For the six months ended May 31, 2004, FSC retained $10,999 in sales charges from the sale of Class A Shares. FSC also retained $941 of contingent deferred sales charges relating to redemptions of Class C Shares. See "What Do Shares Cost?" in the Prospectus.

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 the average daily net assets of the Fund's Institutional Shares, Institutional Service Shares, Class A Shares, Class B Shares and Class C Shares 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

Federated Services Company (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. 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.

Portfolio Accounting Fees

Prior to January 1, 2004, FServ maintained the Fund's accounting records for which it received a fee. The fee was based on the level of the Fund's average daily net assets for the period, plus out-of-pocket expenses. The fee paid to FServ during the reporting period was $16,705, after voluntary waiver, if applicable.

General

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

6. INVESTMENT TRANSACTIONS

Purchases and sales of investments, excluding long-term U.S. government securities and short-term obligations (and in-kind contributions), for the six months ended May 31, 2004, were as follows:

Purchases	$	265,091,223
Sales	$	379,304,652

7. LEGAL PROCEEDINGS

In October 2003, Federated Investors, Inc. and various subsidiaries thereof (including the advisers and distributor for various investment companies, collectively, "Federated"), along with various investment companies sponsored by Federated ("Funds") were named as defendants in several class action lawsuits now pending in the United States District Court for the District of Maryland seeking damages of unspecified amounts. The lawsuits were purportedly filed on behalf of people who purchased, owned and/or redeemed shares of Federated-sponsored mutual funds during specified periods beginning November 1, 1998. The suits are generally similar in alleging that Federated engaged in illegal and improper trading practices including market timing and late trading in concert with certain institutional traders, which allegedly caused financial injury to the mutual fund shareholders. The Board of the Funds has retained the law firm of Dickstein Shapiro Morin & Oshinsky LLP to represent the Funds in these lawsuits. Federated and the Funds, and their respective counsel, are reviewing the allegations and will respond appropriately. Additional lawsuits based upon similar allegations have been filed, and others may be filed in the future. Although Federated does not believe that these lawsuits will have a material adverse effect on the Funds, there can be no assurance that these suits, the ongoing adverse publicity and/or other developments resulting from related regulatory investigations will not result in increased Fund redemptions, reduced sales of Fund shares, or other adverse consequences for the Funds.

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.

VOTING PROXIES ON FUND PORTFOLIO SECURITIES

A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to securities held in the Fund's portfolio is available, without charge and upon request, by calling 1-800-341-7400. This information is also available from the EDGAR database on the SEC's Internet site at http://www.sec.gov.

IMPORTANT NOTICE ABOUT FUND DOCUMENT DELIVERY

In an effort to reduce costs and avoid duplicate mailings, the Fund(s) intend to deliver a single copy of certain documents to each household in which more than one shareholder of the Fund(s) resides (so-called "householding"), as permitted by applicable rules. The Fund's "householding" program covers its/their Prospectus and Statement of Additional Information, and supplements to each, as well as Semi-Annual and Annual Shareholder Reports and any Proxies or information statements. Shareholders must give their written consent to participate in the "householding" program. The Fund is also permitted to treat a shareholder as having given consent ("implied consent") if (i) shareholders with the same last name, or believed to be members of the same family, reside at the same street address or receive mail at the same post office box, (ii) the Fund gives notice of its intent to "household" at least sixty (60) days before it begins "householding" and (iii) none of the shareholders in the household have notified the Fund(s) or their agent of the desire to "opt out" of "householding." Shareholders who have granted written consent, or have been deemed to have granted implied consent, can revoke that consent and opt out of "householding" at any time: shareholders who purchased shares through an intermediary should contact their representative; other shareholders may call the Fund at 1-800-341-7400.

Federated Investors
World-Class Investment Manager

Federated Total Return Bond Fund
Federated Investors Funds
5800 Corporate Drive
Pittsburgh, PA 15237-7000
www.federatedinvestors.com

Contact us at 1-800-341-7400 or
www.federatedinvestors.com/contact

Federated Securities Corp., Distributor

Cusip 31428Q101
Cusip 31428Q507

Federated is a registered mark of Federated Investors, Inc. 2004 ©Federated Investors, Inc.

28556 (7/04)

Item 2.     Code of Ethics

            Not Applicable

Item 3.     Audit Committee Financial Expert

            Not Applicable

Item 4.     Principal Accountant Fees and Services

            Not Applicable

Item 5.     Audit Committee of Listed Registrants

            Not Applicable

Item 6.     Schedule of Investments

            Not Applicable

Item 7.     Disclosure of Proxy Voting Policies and Procedures for
            Closed-End Management Investment Companies

            Not Applicable

Item 8.     Purchases of Equity Securities by Closed-End Management
            Investment Company and Affiliated Purchasers

            Not Applicable

Item 9.     Submission of Matters to a Vote of Security Holders

            Not Applicable

Item 10.    Controls and Procedures

(a)  The   registrant's   President  and  Treasurer   have  concluded  that  the
     registrant's  disclosure  controls  and  procedures  (as  defined  in  rule
     30a-3(c)  under the Act) are  effective  in design  and  operation  and are
     sufficient to form the basis of the certifications required by Rule 30a-(2)
     under the Act, based on their evaluation of these  disclosure  controls and
     procedures within 90 days of the filing date of this report on Form N-CSR.

(b)  There were no changes in the  registrant's  internal control over financial
     reporting  (as  defined  in rule  30a-3(d)  under the Act)  during the last
     fiscal  half  year  (the  registrant's  second  half year in the case of an
     annual report) that have materially  affected,  or are reasonably likely to
     materially  affect,  the  registrant's   internal  control  over  financial
     reporting.

Item 11.    Exhibits


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and
the Investment Company Act of 1940, the registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly
authorized.

Registrant  Federated Total Return Series, Inc.

By          /S/ Richard J. Thomas, Principal Financial Officer
Date        July 22, 2004


Pursuant to the  requirements  of the  Securities  Exchange  Act of 1934 and the
Investment  Company  Act of  1940,  this  report  has been  signed  below by the
following  persons on behalf of the  registrant and in the capacities and on the
dates indicated.


By          /S/ J. Christopher Donahue, Principal Executive Officer
Date        July 22, 2004


By          /S/ Richard J. Thomas, Principal Financial Officer
Date        July 22, 2004