Midfielders Alexander Hleb, now at Sutttgart, and Mathieu Flamini, at AC Milan, have left a substantial hole in the Gunners side, which manager Arsene Wenger has struggled to fill, according to Ancelotti.
But the Italian does not see any team as clear favourites for Europe's premier club trophy.
"I see a very balanced and uncertain tournament," he said, according to The Daily Mail.
"Besides Liverpool, all the top teams are in the contention. From the group winners, all the teams are difficult.
"The only one that has less experience is Arsenal, a very young side.
"They have lost several key players with respect to when they eliminated Milan two years ago in the last 16.
"In midfield there's always (Cesc) Fabregas, but Flamini and Hleb left the club and those were two big losses."
Zack Wilson, Goal.com UK