Third Sector has learned that RNLI, NACRO, Sue Ryder Care, National Trust for Scotland, Charities Aid Foundation, Cancer Research UK and the Leukaemia Research Fund will be named by Campaign Against Arms Trade (CAAT) on its website.
The research is part of CAAT's Clean Investment Campaign 2002, which aims to encourage charities, local authorities, trade unions, churches and pension funds to pull out of arms investments.
Richard Bingley, media co-ordinator of CAAT, said: "It is a shame organisations dedicated to charity at home gain proceeds from companies that sell weapons into areas of conflict and divert spending away from development abroad."
Cancer Research UK has more than 30,000 shares worth around ?£100,000 in BAE Systems and investments in GKN and Smiths Group. BAE has sold Hawk training jets to Saudi Arabia, Indonesia and Zimbabwe, while Smiths Group supplies the Israeli and Indian air forces.
But James Davidson, corporate integration director with Cancer Research UK, defended the charities's investments: "I sympathise with CAAT's position but our first responsibility is to protect the reserves we have built up over many years and to invest these broadly and prudently in the market. If we restrict our investments to a small number of companies, it brings extra risk into the portfolio."
Davidson also questioned whether companies such as BAE and GKN deserved to be designated armaments companies when arms production was not a large part of their product range.
Cancer Research UK has an ethical investment policy but this only excludes tobacco manufacturers because of their blatant incompatibility with the aims of the charity. However, a review of the ethical investment policy following the merger has been initiated and should be completed by the end of the year.
Charities Aid Foundation is named on the list because it holds shares on behalf of other charities. CAF says it has no influence over the choice of investment. However, it also invests the CAF Balanced Growth Fund, which contains small holdings in BAE and GKN.
Charities face a complicated legal environment if they want to invest ethically. The Charity Commission permits them to exclude companies whose activities conflict with their aims. But "unethical
companies that do not directly affect their work can only be excluded if it does not result in "significant economic disadvantage".