Form N-CSR BERNSTEIN SANFORD C FUND For: Sep 30

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Portfolio Manager Commentary (Unaudited)

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Portfolio Manager Commentary (continued)

The Portfolio seeks
to maintain an effective duration of three to seven years under normal market conditions. Duration is a measure that relates the expected price volatility of a security to changes in interest rates. The duration of a debt security is the weighted
average term to maturity, expressed in years, of the present value of all future cash flows, including coupon payments and principal repayments.

The
Adviser selects securities for purchase or sale based on its assessment of the securities’ risk and return characteristics as well as the securities’ impact on the overall risk and return characteristics of the Portfolio. In making this
assessment, the Adviser takes into account various factors including the credit quality and sensitivity to interest rates of the securities under consideration and of the Portfolio’s other holdings.

The Portfolio may enter into foreign currency transactions on a spot (i.e., cash) basis or through the use of derivatives transactions, such as
forward currency exchange contracts, currency futures and options thereon, and options on currencies. An appropriate hedge of currency exposure resulting from the Portfolio’s securities positions may not be available or cost effective, or the
Adviser may determine not to hedge the positions, possibly even under market conditions where doing so could benefit the Portfolio.

Investment Results

The table on page 8 shows the Portfolio’s performance compared to its benchmark, the Bloomberg US Aggregate Bond Index, for the six- and 12-month periods ended September 30, 2022. The table also includes the Portfolio’s peer group, as represented by the Lipper Core Bond Funds Average (the
“Lipper Average”). Funds in the Lipper Average have generally similar investment objectives to the Portfolio, although some of the funds may have different investment policies, sales and management fees, and fund expenses.

During both periods, the Portfolio underperformed the benchmark and outperformed the Lipper Average. In the 12-month
period, yield-curve positioning was the largest detractor, relative to the benchmark, mostly from overweights to the five- and 10-year parts of the curve that were partially offset by an overweight to the six-month part of the curve and an underweight to the 20-year part of the yield curve. Security selection also detracted, as selection within investment-grade corporate bonds,
asset-backed securities and US agency mortgages outweighed a gain from selection within commercial mortgage-backed securities (“CMBS”). Sector allocation contributed, due primarily to gains from an underweight to US agency mortgages, an
overweight to asset-backed securities and exposure to US inflation-linked bonds that were greater than losses from allocation to collateralized loan obligations, agency risk-sharing transactions and eurozone high-yield corporate bonds. Currency
decisions also contributed, mainly from short positions in the Swedish krona and offshore Chinese renminbi. Country allocation was a minor contributor to performance during the period.

During the six-month period, security selection within investment-grade corporate bonds and asset-backed securities
was the largest detractor, offset by gains from selection within CMBS. Country allocation to Japan and the UK also detracted, offset partially by allocation to the eurozone. Yield-curve positioning was a minor detractor to performance. Currency
decisions contributed the most to performance, due to short positions in the offshore Chinese renminbi, Australian dollar and Canadian dollar. Sector allocation also contributed, as gains from an underweight to US agency mortgages, an overweight to
asset-backed securities and exposure to US inflation-linked bonds were larger than a loss from exposure to collateralized mortgage obligations and agency risk-sharing transactions.

During both periods, the Portfolio utilized derivatives in the form of interest rate swaps and futures to manage and hedge duration risk and/or to take
active yield-curve positioning. Currency forwards were used to hedge foreign currency exposure and to take active currency risk. Inflation swaps were used to hedge inflation and for investment purposes to incorporate the Portfolio’s Investment
Management Team’s view on future inflation in the Portfolio. Credit default swaps were utilized to hedge credit risk and as a tool to effectively gain exposure to specific sectors. The utilization of government-agency-related To Be Announced
mortgage positions was a significant contributor to the Portfolio’s turnover rate of 129%.

Market Review and Investment Strategy

During the 12-month period ended September 30, 2022, fixed-income government bond market yields increased
rapidly, and bond prices fell in all developed markets. Most major central banks aggressively tightened monetary policy by raising short-term interest rates and ending bond purchases to combat high and persistent inflation. Developed-market
government bonds fell the most in the UK and eurozone, and by the least in Japan. In credit risk sectors, securitized assets generally outperformed corporate bonds. Investment-grade corporate bonds trailed

(Portfolio Manager Commentary continued on next page)

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Portfolio Manager Commentary (continued)

treasuries,
underperforming in the US against US Treasuries, while outperforming in the eurozone relative to eurozone treasuries. High-yield corporate bonds trailed in the US versus US Treasuries while eurozone high yield outperformed eurozone treasuries.
Investment-grade emerging-market corporate bonds slightly trailed developed-market corporates.

Longer-maturity emerging-market sovereign bonds
underperformed developed-market treasuries. Emerging-market local-currency bonds lagged as the US dollar advanced against almost all developed- and emerging-market currencies. Brent crude oil prices ended the period higher, even as prices fell
sharply in the final quarter on global growth concerns and reduced demand.

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Disclosures and Risks (Unaudited)

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Disclosures and Risks (continued)

greater, credit
“spreads” (i.e., the difference between the yields on lower quality securities and the yields on higher quality securities) may get larger or “widen”. As a result, the values of the lower quality securities may go down
more and they may become harder to sell.

Duration Risk: The duration of a fixed-income security may be shorter than or equal to full maturity of
the fixed-income security. Fixed-income securities with longer durations have more interest-rate risk and will decrease in price as interest rates rise. Securities that have final maturities longer than their durations may be affected by increased
credit spreads to a far greater degree than their durations would suggest, because they are exposed to credit risk until final maturity.

Inflation
Risk: This is the risk that the value of assets or income from investments will be less in the future as inflation decreases the value of money. As inflation increases, the value of the Portfolio’s assets can decline as can the value of the
Portfolio’s distributions. This risk is significantly greater for fixed-income securities with longer maturities. Rates of inflation have recently risen, which could adversely affect economies and markets.

Inflation-Protected Securities Risk: The terms of inflation-protected securities provide for the coupon and/or maturity value to be adjusted based on
changes in an inflation index. Decreases in the inflation rate or in investors’ expectations about inflation could cause these securities to underperform non-inflation-adjusted securities on a
total-return basis. In addition, there can be no assurance that the relevant inflation index will accurately measure the rate of inflation, in which case the securities may not work as intended. These securities may be more difficult to trade or
dispose of than other types of securities.

Foreign (Non-US) Securities Risk: Investments in foreign
securities entail significant risks in addition to those customarily associated with investing in securities such as less liquid, less transparent, less regulated and more volatile markets. These risks include risks related to unfavorable or
unsuccessful government actions, reduction of government or central bank support, inadequate accounting standards and auditing and financial recordkeeping requirements, lack of information, and adverse market, economic, political and regulatory
factors and social instability, all of which could disrupt the financial markets in which the Portfolio invests and adversely affect the value of the Portfolio’s assets.

Emerging-Markets Securities Risk: The risks of investing in foreign (non-US) securities are heightened with
respect to issuers in emerging-market countries because the markets are less developed and less liquid and there may be a greater amount of economic, political and social uncertainty, and these risks are even more pronounced in “frontier”
markets, which are investable markets with lower total market capitalization and liquidity than the more developed emerging markets. Emerging markets typically have fewer medical and economic resources than more developed countries, and thus they
may be less able to control or mitigate the effects of a pandemic. In addition, the value of the Portfolio’s investments may decline because of factors such as unfavorable or unsuccessful government actions and reduction of government or
central bank support.

Derivatives Risk: The Portfolio may use derivatives as direct investments to earn income, enhance return and broaden
portfolio diversification, which entail greater risk than if used solely for hedging purposes. In addition to other risks such as the credit risk of the counterparty, derivatives involve the risk that changes in the value of the derivative may not
correlate with relevant assets, rates or indices. Derivatives may be difficult to price or unwind, and small changes may produce disproportionate losses for the Portfolio. Certain derivatives have the potential for unlimited loss, regardless of the
size of the initial investment. Assets required to be set aside or posted to cover or secure derivatives positions may themselves go down in value, and these collateral and other requirements may limit investment flexibility. Some derivatives
involve leverage, which can make the Portfolio more volatile and can compound other risks. Derivatives, especially over-the-counter derivatives, are also subject to
counterparty risk, which is the risk that the counterparty (the party on the other side of the transaction) on a derivative transaction will be unable or unwilling to honor its contractual obligations to the Portfolio. Use of derivatives may have
different tax consequences for the Portfolio than an investment in the underlying asset or index, and such differences may affect the amount, timing and character of income distributed to shareholders. The US government and certain foreign
governments have adopted regulations governing derivatives markets, including mandatory clearing of certain derivatives as well as additional regulations governing margin, reporting and registration requirements. The ultimate impact of the
regulations remains unclear. Additional regulation may make derivatives more costly, limit their availability or utility, otherwise adversely affect their performance, or disrupt markets.

(Disclosures and Risks continued on next page)

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Disclosures and Risks (continued)

Mortgage-Related
Securities Risk: Mortgage-related securities represent interests in “pools” of mortgages, including consumer loans or receivables held in trust. Mortgage-related securities are subject to credit, interest-rate, prepayment and extension
risks. These securities also are subject to risk of default on the underlying mortgage, particularly during periods of economic downturn. Small movements in interest rates (both increases and decreases) may quickly and significantly reduce the value
of certain mortgage-related securities. Asset-related securities entail certain risks not presented by mortgage-backed securities, including the risk that it may be difficult to perfect the liens securing any collateral backing certain asset-backed
securities.

Prepayment and Extension Risk: Prepayment risk is the risk that a loan, bond or other security might be called or otherwise
converted, prepaid or redeemed before maturity. If this happens, particularly during a time of declining interest rates or credit spreads, the Portfolio will not benefit from the rise in market price that normally accompanies a decline in interest
rates, and may not be able to invest the proceeds in securities providing as much income, resulting in a lower yield to the Portfolio. Conversely, extension risk is the risk that as interest rates rise or spreads widen, payments of securities may
occur more slowly than anticipated by the market. If this happens, the values of these securities may go down because their interest rates are lower than current market rates and they remain outstanding longer than anticipated.

Subordination Risk: The Portfolio may invest in securities that are subordinated to more senior securities of an issuer, or which represent interests
in pools of such subordinated securities. Subordinated securities will be disproportionately affected by a default or even a perceived decline in creditworthiness of the issuer. Subordinated securities are more likely to suffer a credit loss than non-subordinated securities of the same issuer, any loss incurred by the subordinated securities is likely to be proportionately greater, and any recovery of interest or principal may take more time.

Management Risk: The Portfolio is subject to management risk because it is an actively managed investment portfolio. The Adviser will apply its
investment techniques and risk analyses in making investment decisions for the Portfolio, but these techniques, analyses and decisions may not work as intended or may not produce the desired results, and may, during certain periods, result in
increased volatility for the Portfolio or cause the value of the Portfolio’s shares to go down. In some cases, derivatives and other investment techniques may be unavailable or the Adviser may determine not to use them, possibly even under
market conditions where their use could benefit the Portfolio. Some of these techniques may incorporate, or rely upon, quantitative models, but there is no guarantee that these models will generate accurate forecasts, reduce risk or otherwise
perform as expected. In addition, the Adviser may change the Portfolio’s investment strategies or policies from time to time. Those changes may not lead to the results intended by the Adviser and could have an adverse on effect the value or
performance of the Portfolio.

Illiquid Investments Risk: Illiquid investments risk exists when particular investments are difficult or impossible
to purchase or sell, possibly preventing the Portfolio from purchasing or selling these securities at an advantageous price. Over recent years, regulatory changes have led to reduced liquidity in the marketplace, and the capacity of dealers to make
markets in fixed-income securities has been outpaced by the growth in the size of the fixed-income markets. Illiquid investments risk may be magnified in a rising interest-rate environment, where the value and liquidity of fixed-income securities
generally go down.

Redemption Risk: The Portfolio may experience heavy redemptions that could cause the Portfolio to liquidate its assets at
inopportune times or unfavorable prices or increase or accelerate taxable gains or transaction costs and may negatively affect the Portfolio’s net asset value or performance, which could cause the value of your investment to decline. Redemption
risk is heightened during periods of overall market turmoil.

Foreign Currency Risk: This is the risk that changes in foreign (non-US) currency exchange rates may negatively affect the value of the Portfolio’s investments or reduce the returns of the Portfolio. For example, the value of the Portfolio’s investments in foreign
securities and foreign currency positions may decrease if the US dollar is strong (i.e., gaining value relative to other currencies) and other currencies are weak (i.e., losing value relative to the US dollar).

Actions by a Few Major Investors: In certain countries, volatility may be heightened by actions of a few major investors. For example, substantial
increases or decreases in cash flows of mutual funds investing in these markets could significantly affect local securities prices and, therefore, share prices of the Portfolio.

Market Risk: The Portfolio is subject to market risk, which is the risk that stock or bond prices in general or in particular

(Disclosures and Risks continued on next page)

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Disclosures and Risks (continued)

countries or sectors
may decline over short or extended periods. Stock or bond prices may decline in response to adverse changes in the economy or the economic outlook; deterioration in investor sentiment; interest-rate, currency and commodity price fluctuations;
adverse geopolitical, social or environmental developments; issuer- and sector-specific considerations; public health crises (including the occurrence of a contagious disease or illness); policy and legislative changes; cybersecurity events; and
other factors.

Economies and financial markets throughout the world are becoming increasingly interconnected. Economic, financial or political events,
trading and tariff arrangements, sanctions, regional and global conflicts, terrorism, natural disasters (including the spread of infectious illness) and other circumstances in one country or region could have profound impacts on global economies or
markets. As a result, whether or not the Portfolio invests in securities of issuers located in or with significant exposure to countries experiencing economic and financial difficulties, the value and liquidity of the Portfolio’s investments
may be negatively affected.

Lower-rated Securities Risk: Lower-rated securities, or junk bonds/high-yield securities, are subject to greater risk
of loss of principal and interest and greater market risk than higher-rated securities. The capacity of issuers of lower-rated securities to pay interest and repay principal is more likely to weaken than is that of issuers of higher-rated securities
in times of deteriorating economic conditions or rising interest rates.

These risks are discussed in further detail in the Portfolio’s prospectus.

An Important Note About Historical Performance

Except as noted, returns do not reflect the deduction of taxes that a shareholder would pay on portfolio distributions or the redemption of portfolio
shares. All fees and expenses related to the operation of the Portfolio have been deducted.

The performance shown in this report represents past
performance and does not guarantee future results. Performance information is as of the dates shown. Current performance may be lower or higher than the performance information shown. You may obtain performance information current to the most recent
month-end by visiting www.Bernstein.com or by calling 212.756.4097. The investment return and principal value of an investment in the Portfolio will fluctuate, so that shares, when redeemed, may be worth more
or less than their original cost.

Investors should consider the investment objectives, risks, charges and expenses of
the Portfolio carefully before investing. For copies of our prospectus or summary prospectus, which contain this and other information, visit www.Bernstein.com, click on “Investments”, found in the footer, then “Mutual Fund
Information—Prospectuses, SAIs and Shareholder Reports”, or call Bernstein’s mutual fund shareholder help line at 212.756.4097 or contact your Bernstein Advisor. Please read the prospectus and/or summary prospectus carefully before
investing.

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Historical Performance (Unaudited)

Intermediate Duration Institutional Portfolio vs. Its
Benchmark and Lipper Average

 

		TOTAL RETURNS								AVERAGE ANNUAL TOTAL RETURNS
THROUGH SEPTEMBER 30, 2022		PAST SIX MONTHS				PAST 12 MONTHS				PAST FIVE YEARS				PAST 10 YEARS				SINCE INCEPTION				INCEPTION DATE
Intermediate Duration Institutional Portfolio1			-9.61	%			-15.13	%			-0.28	%			1.16	%			3.55	%			5/17/2002
Bloomberg US Aggregate Bond Index			-9.22	%			-14.60	%			-0.27	%			0.89	%			3.35	%
Lipper Core Bond Funds Average			-9.67	%			-15.18	%			-0.34	%			0.83	%			—

 

1

There are no sales charges associated with an investment in the Portfolio. Total returns and average annual returns are therefore the same.

The current prospectus table shows the total annual operating expense ratio for the Portfolio as 0.52%, gross of any fee waivers or expense reimbursements. Contractual
fee waivers and/or expense reimbursements reduced the total annual operating expense ratio to 0.45%. These waivers/reimbursements may not be terminated before January 28, 2023, and may be extended by the Adviser for additional one-year terms. Absent reimbursements or waivers, performance would have been lower. The Financial Highlights section of this report sets forth expense ratio data for the current reporting period; the expense ratio
shown above may differ from the expense ratio in the Financial Highlights section since they are based on different time periods.

 

Growth of a $25,000 Investment in the Portfolio

The chart illustrates the total value of an assumed $25,000 minimum investment as compared to the performance of the Portfolio’s
benchmark and Lipper Average for the 10-year period ended September 30, 2022.

Portfolio
Summary—September 30, 2022 (Unaudited)

 

Security Type Breakdown1

 

1

All data are as of September 30, 2022. The Portfolio’s security type breakdown is expressed as a percentage of total investments and may vary over time. The Portfolio also enters into derivative transactions, which may be used for hedging or investment purposes (see “Schedule of Investments” section of the report for additional details).

 

2

“Other” represents less than 0.3% in Governments—Sovereign Bonds and Quasi-Sovereigns.

See Disclosures, Risks and Note About Historical Performance on pages 4-7.

 

8		Sanford C. Bernstein Fund II, Inc.

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Expense Example—September 30, 2022 (Unaudited)

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Schedule of Investments

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Schedule of Investments (continued)

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Schedule of Investments (continued)

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