The last five years have been tough for those in retirement. Portfolio valuations have been hammered and annuity rates have plunged. There's no sign of things improving anytime soon, either, as the eurozone and the UK economy look set to muddle through at best for some years to come.

A great way of protecting yourself from the downturn, however, is by building your retirement fund with shares of large, well-run companies that should grow their earnings steadily over the coming decades. Over time, such investments ought to result in rising dividends and inflation-beating capital growth.

In this series, I'm tracking down the UK large-caps that have the potential to beat the FTSE 100 (Euronext: VFTSE.NX - news) (UKX) over the long term and support a lower-risk income-generating retirement fund.

Today, I'm going to take a look at GlaxoSmithKline (Other OTC: GLAXF.PK - news) , the UK's largest pharmaceutical company.

Performance enhancing drugs

GlaxoSmithKline's product range includes consumer brands such as Lucozade, Sensodyne and Nicorette, as well as its prescription drugs and vaccines. It's a classic defensive stock and has been far less volatile than the FTSE 100 over the last 5 years:

Source: Morningstar (NasdaqGS: MORN - news)

(Total (Other OTC: TTFNF.PK - news) return includes both changes to the share price and reinvested dividends. These two ingredients combined are what make it possible for equity portfolios to regularly outperform cash and bonds over the long term.)

Although GSK's trailing 10 year average total return is below that of the FTSE 100, anyone holding GSK shares from 2007 until today would have seen a total return, including reinvested dividends, of 40%, compared to 12% for the FTSE 100 total return index.

What's The Score?

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Is GlaxoSmithKline The Ultimate Retirement Share?