NEW YORK (Reuters) - U.S. prime money market funds boosted their holdings of euro zone bank debt in May as part of a broader move into higher-yielding investments, according to a report by JPMorgan Securities released on Wednesday.

The report showed the funds raised their ownership of euro zone securities by $12 billion, to $217 billion, last month, led by an increase in French bank debt that included certificates of deposits and time deposits, JPMorgan said.

On a year-to-date basis, the funds' euro zone bank exposure increased by $15 billion.

These funds, seen as alternatives to bank accounts, "continued to allocate more cash into bank credit, particularly into European banks," JPMorgan analysts wrote in the report.

Prime money funds also bought a combined $10 billion in Norwegian, Swedish, Swiss and British bank paper last month. This raised their year-to-date purchases of this debt to $26 billion, bringing their total holdings to $249 billion, they said.

In addition to European bank paper, they bought more municipal and corporate debt in May, while they pared holdings of U.S. Treasuries, U.S. agencies, U.S. bank and asset-backed commercial paper, they said.

Prime funds' holdings of U.S. debt fell $3 billion to $173 billion in May. In the first five months of 2013, their U.S. debt holdings have declined $21 billion.

(Editing by James Dalgleish)