The Gunners are narrowly ahead of closest rivals Tottenham on goal difference after winning four of their opening five games.
"From the start I had my reservations. They seemed not to be spending but then came up with one big investment right at the end of the transfer window," Owen wrote in his column for the Daily Telegraph.
"When I look at a squad I see a decent collection of players but not a top-four operation.
"From the back: the goalkeeper, Wojciech Szczesny is capable but I would have the keeper of all the other top teams ahead of Arsenal’s.
"In defence, Arsenal are decent, but again none of their back four would make a composite Premier League XI.
"If I look right the way through the Arsenal team, with a view to picking an all-star side from the top six clubs, I would struggle to nominate one Arsenal player. Mesut Ozil is the only one who would have a chance."
Owen, who scored 40 goals in 89 outings for England, retired in May, having played for the Reds, Real Madrid, Newcastle, Manchester United and most recently Stoke City.