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Comic Relief chief executive Kevin Cahill, speaking on BBC Radio 4's World At One, accepted that Comic Relief had a "small percentage" of cash in areas such as tobacco and arms firms through managed funds.
"There's no more than 5 percent of our funds in those particular areas," he said.
After being told ethical funds had outperformed FTSE 100 companies index over recent periods, he said: "Our trustees were acting in good faith in what they were doing.
"It's very good to hear that, in fact, the potential exists within ethical funds to match the return because Comic Relief would clearly choose to be in those if the return was equal or better to where we currently are so it's a no brainer for us to be in those funds."
Comic Relief - which has been criticised for its dealings with the tobacco and arms industries - has avoided a policy of ethical screening for its investments because the charity says it does not want to limit the amount of money it raises.
BBC Panorama highlighted that Comic Relief had £630,000 in shares in BAE Systems, a leading weapons manufacturer, in 2009 despite having a mission statement which talks of a commitment to help "people affected by conflict".
The charity has also given money to help the fight against tuberculosis but had £3 million of its money wrapped up in tobacco companies in the same year, even though smoking is said to be a contributory factor in many TB cases.
And although it aims to reduce alcohol misuse and its spin-off effects, the charity had £300,000 invested in the drinks industry in 2009. Panorama said Comic Relief refused to reveal its current investments.
Comic Relief is to conduct a "full review" of its investment policy after the charity was criticised for its dealings with the tobacco and arms industries.
A BBC Panorama programme screened last night highlighted the money that the charity has tied up in some areas which appear to run counter to its aims because it does not exercise any sort of ethical screening on its investments.
But chief executive Kevin Cahill said that it will look again at where it puts its funds in order to do "the right thing".
BBC1's documentary claims Comic Relief could have generated more cash from shrewd investments in "ethical" funds.
The charity, which generates huge publicity for its activities with star-studded programmes screened by the BBC, has avoided a policy of ethical screening for its investments because it says it does not want to limit the amount of money it raises.